FORT LAUDERDALE, Florida – After a soaring real estate market throughout most of the pandemic that saw record highs, luxury sales for single-family homes have leveled off for three straight quarters.
According to data from the Keyes/Illustrated Luxury Report, South Florida (spanning Miami-Dade County up to the Treasure Coast) luxury sales, meaning single-family homes selling for $1 million and up, have essentially remained stagnant since the third quarter of last year.
Looking at the past two years of real estate action in South Florida, sales volume increased during the start of the pandemic housing surge in June of 2020, before reaching the highest levels so far in the second quarter of 2021, and then leveling off. Numbers are still significantly higher than pre-pandemic sales, however.
“I think there is no question that the June of 2020 ‘til 2021 was the hottest super surge of the accelerated Covid buying,” said Mike Pappas, CEO of Keyes Realty in South Florida. “It was led by the luxury market and those that had funds and the ability to move.”
For the first quarter of 2022, the luxury single-family home sales volume in terms of price in South Florida reached $5,564,861,079, a 3.2% decrease from the same quarter a year ago, when total sales volume in terms of price reached $5,750,323,765, the reports show.
Sales volume for single-family homes hit its highest point in the second quarter of 2021, when total sales for South Florida were at $8,206,236,421.
Pappas theorizes that the three-quarter plateau could be due to two things: a settling to a more normal market as well as a severe lack of inventory.
“I would say that this is another sign that we are nearing the peak of housing cycle,” said Ken H. Johnson, real estate economist at Florida Atlantic University. “We started at the bottom of the cycle in 2012 and we’ve been on the upswing for about ten years.”
The raw number of sales also seems to have started to level off. The total sales for single-family homes for the first quarter of 2022 was 1,949, a small 2% percent increase from the same quarter last year when total sales were at 1,909.
“Sales have plateaued in this market largely due to the lack of inventory,” said Bonnie Heatzig, executive director of luxury sales at Douglas Elliman in Boca Raton. “More inventory coming to the market would break the plateau and sale levels would increase to match the very high demand that is circulating our luxury market.”
She noticed a slight “buyer breather” in the first quarter of 2022, which could be attributed to rising interest rates, rising inflation and geo-political conflicts. She also says she’s seen an uptick in buyers as the market heads into the second quarter of the year – South Florida’s traditional peak season for real estate sales.
From her perspective, she says buyers are starting to understand that prices will remain high for the foreseeable future.
Luxury condos are a different story. Units priced at one million and up have started to see significant increases in the first quarter of this year. Total sales volume for luxury condos increased to $3,683,915,489, a 39% increase from the same quarter a year before. The number of sales also rose to 1433, a 31% increase from the year prior.
Pappas’ assessment of the high-end condo surge is that some buyers avoided condos out of concerns for lockdowns and not being able to use amenities, and that reticence is fading.
“There is confidence in the condo market again,” Pappas said.
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