South Florida’s housing market may not be as frenzied as it was a few years ago, but the February figures from local Realtor boards show that sellers are still winning the price fight.
Median prices for existing, single-family homes in Palm Beach and Broward counties increased last month from a year earlier, pushed higher by a shortage of homes for sale that limits the leverage of buyers.
Palm Beach County’s median price was $315,000, 7 percent higher than February 2016, the Realtors Association of the Palm Beaches said Wednesday. Broward’s median inched up 1 percent to $302,500, according to the Greater Fort Lauderdale Realtors.
Prices have been on the upswing for the past five years following the end of the housing collapse. Low interest rates and a more stable job market have strengthened confidence in housing.
Single-family sales rose 1 percent in February in Palm Beach County, but deals were harder to come by in Broward, where transactions dropped 16 percent last month.
Mike Pappas, president of the Keyes Co. brokerage throughout South Florida, said demand for starter and mid-priced homes is much stronger than it is for luxury properties.
At the end of February, Palm Beach County had 3,098 single-family listings under $500,000, a 16 percent decline from a year ago, Pappas said. The market is even tighter in Broward, which saw a 39 percent drop in under-$500,000 listings from February 2016, Pappas said.
“Anything under $500,000, if it’s priced right, it’s selling within 30 days,” he said. “Once you get above that price, there is more supply than demand and homes aren’t selling as fast.”
While sellers are still largely in control, buyers are making headway, some real estate observers say.
Buyers won’t consider obviously overpriced homes, and they are more willing to wait for the right property that doesn’t need major repairs, agents say.
Eli Beracha, professor of real estate investment at Florida International University, said rising interest rates are reducing purchasing power. The average rate for a 30-year fixed mortgage in February was 4.17 percent, up from 3.66 percent a year earlier, according to Freddie Mac figures cited by the Florida Realtors.
What’s more, buyers today have learned from the housing bust and are more wary of overspending, Beracha said.
“I think buyers still believe housing prices will go up, but they are afraid, and in some cases unable, to pay too much for a house today,” he said. “But that’s healthy. You want to see two sides with power in negotiations.”
Some real estate agents expect the higher interest rates to help bring more buyers to the closing table.
“That’s counter-intuitive because you’d think rising interest rates would chase people away, but instead it’s the opposite,” said Douglas Rill, broker at Century 21 America’s Choice in West Palm Beach. “When interest rates start to rise, people start to panic. They say, ‘Oh my gosh, I was holding off, but now it’s time for me to jump in.”
Prices also increased for existing condominiums in February from a year earlier.
Palm Beach County’s median increased 14 percent to $165,000. Broward’s median was 8 percent higher at $147,750.
© 2017 Sun Sentinel. Distributed by Tribune Content Agency