Rising Florida home prices have a hit speed bump, and that’s good news for the buyer market. The slowdown comes on the heels of four years of price increases, mostly fueled by demand from foreign investors.
After double digit growth in 2013 and 2014, prices in Miami-Dade, Broward and Palm Beach counties rose only 6.2 percent between March 2015 and March 2016, the slowest pace since 2012, according to S&P/Case Shiller Home Price Indices.
Home prices in the Tampa area grew 7.6 percent. The median sale price statewide increased 10.3 percent between March 2015 and March 2016, according to the Florida Realtors Association.
Florida Buyer’s Market: Wages Rising in Florida
The upswing in median home prices over the past few years has kept many would-be buyers out of the market, despite the continued availability of low mortgage rates. Plateauing prices could turn the tables, if wage growth continues, experts say.
South Florida outpaced the nation in wage increases of 3.5 percent compared to 2 percent nationally for the year that ended in March 2016, according to the U.S. Bureau of Labor Statistics.
More inventory and stalling prices could make homes more affordable to buyers, many of whom have been wary of bidding on overpriced homes after the market boom and subsequent downturn.
Some sellers have overpriced their properties, hoping to cash in on the upswing in recent years, but buyers aren’t caving.
Savvy buyers are waiting to see if sellers will lower their prices. As inventory increases, sellers are expected to lower prices in order to compete with comparable listings. Homes that are priced correctly will sell within 45 days; overpriced listings will take longer. And the longer a property sits on the market, the more shopworn it becomes. Serious sellers don’t want to risk a stale listing, giving buyers even more leverage when it comes to getting a home at the right price.
“There is strong evidence that this market has learned from the crash,” Ken Johnson, an economist and professor at Florida Atlantic University, recently told the Sun Sentinel.
Home sales fell throughout much of the state in April, Florida Realtors Association data shows.
Despite slowing sales, the market is still stable, according to a national Freddie Mac report. Palm Beach, Broward and Miami-Dade counties scored a 90 on the mortgage company’s Multi-Indicator Market Index. Anything over an 80 is considered stable. That’s also good news for buyers worried the market may be heading toward another crash.
Economists expect house price appreciation to continue to slow this year toward a plateau. However, major price declines are not expected throughout the state.
Taking all this information together, it looks to be a favorable climate for those wishing to purchase a home. An increase in wages coupled with a leveling off of price increases – and motivated sellers – means it could be a good market in many parts of Florida for those looking to buy property.