By Gay Cororaton, MIAMI REALTORS Chief Economist
With South Florida inventory dwindling and buyer competition intensifying, buyers saw smaller price discounts compared to the beginning of the year and compared to pre-pandemic level in 2019, especially for $600,000 or lower homes. Discounts are shrinking amid dwindling inventory and with homes typically sold in about two weeks. Price discounts also tend to get smaller during the first half of the year where demand is seasonally on the upswing.
In Miami-Dade County, the median sales to list price ratio for single-family homes has increased to 97% as of July 2023 after hitting a low of 93% in January 2023. In July 2019 (pre-pandemic), the median sales to list price was 95.5%.
The median single-family sales to list price ratio has increased with the depletion of active listings on the market. After mortgage rates started to rise in 2022, there was a buildup in active listings, to a peak of 4,288 listings as of the end of November 2022, up 53% from the prior year. However, inventory has since declined and as of July 2023, active listings have fallen to just 2,860, down 23% year-over-year. As of July 2023, active listings are just 44% of the pre-pandemic level in July 2019.
In Broward County, the median single-family sales to list price ratio stood at 98% as of July 2023, up from 95% at the beginning of the year and at 96% in July 2019. Active listings are down 13% year-over-year to 2,869 units after surging to 3,822 units in November 2022. As of July 2023, active listings are equivalent to 52% of the pre-pandemic level in July 2019.
In Palm Beach, the median single-family sales to list price ratio was 96% as of July 2023, up from 93% in November 2022 and 95% in July 2019. Active listings are 11% lower from one year ago, at 3,430 homes for sales, after building up to 4,322 units in October 2022. As of July 2023, active listings are equivalent to 53% of the pre-pandemic level in July 2019.
In Martin County, the median single-family sales to list price ratio was 96% as of July 2023, up from 94.8% in February 023 and 94.9% in July 2019. Active listings have not shrunk as much, but they are still down 4% from one year ago to 473 units after a small buildup to 520 units in November 2022. As of July 2023, active listings are equivalent to 68% of the pre-pandemic level in July 2019.
Lower price discounts for homes below $600,000
Buyers looking for homes below $600,000 – an affordable price range for a household earning $150,000 – should expect even smaller price discounts because of the limited inventory of these homes.
In Miami-Dade, the median sales to list price for homes at $400,000 to $599,000 was 99.5% as of July, or a typical discount of 0.5%. This is an affordable price point for a family with an income of $150,000. However, competition is tough as homes at this price range make up just 19% of the listings. Half of the homes sold at this price point were on the market for only 17 days.
In Broward, homes in the $400,000 to $599,000 price range typically sold at the list price with no price discount. Again, competition is tough, with homes at this price point accounting for 20% of listings. Half of the homes sold at this price point were on the market for only 15 days.
In Palm Beach, homes priced at $ 300,000 to $399,000 had the highest median sales to list price, at 97.5%. Listings at this price point made up 6% of total listings. Half of homes that sold at this price point also sold in 17 days.
In Martin, single-family homes below $300,000 had the highest median sales to list price, at 98.2%. There is very little inventory for homes at this price, making up just 3% of listings. Half of homes that sold at this price point also sold in a week.
What this Means for Buyers and Sellers
Sellers are still willing to offer price discounts but those won’t be generous, likely at just 1% since inventory is very tight. Buyers should expect to be prepared to make offers at the list price to snag the home they can afford and that fits their needs.
The South Florida market is still a seller’s market, enabling homeowners to reap the wealth gains from homeownership.
Work with a Realtor® to help you assess market conditions and to help you make the best offer or price your property to maximize returns.
