South Florida Home Prices Up 13% From Last May
The price of existing single-family homes in Broward, Miami-Dade and Palm Beach counties saw a rise of 13.2 percent in May 2014 in comparison to the prices of May, 2013. The statistics were reported in the Standard & Poor’s/Case-Shiller index, released in the end of June. In addition to this considerable rise from last year, the index also reported a rise of 1.2 percent from April to May, 2014.
The Standard & Poor’s/Case-Shiller index measures 20 regions on a national basis and discovered that price increases have seen a significant reduction in speed. In reality, the aforementioned rise in price was a result of one of the slowest paced increments since February, 2013.
Demand in Florida is High
According to many real estate experts, a rise in housing prices is mainly a result of a limited number of houses in the market. This is indeed a seller’s market where those who have put their properties on the market have greater control of the price. South Florida is generally a highly sought after residential destination with many beautiful properties to offer. From expansive waterfront homes all the way to luxurious condos, South Florida combines summer weather with exquisite properties in exclusive neighborhoods. With fewer properties in the market, motivated buyers are much more likely to offer higher prices and in some cases take part in bidding wars to get their hands on the house they want. This of course, drives the prices up.
Within the past few months, the housing market displayed mixed economic numbers. While the prices of existing homes have climbed up, construction and the sales statistics of new houses are still in the low zone. If we are to look at the prices from a national point of view, the prices of houses have gone up 9.3 percent from May 2013.
The Mortgage Myth
It is a common belief that house prices have a relationship to mortgage interest rates. Many buyers believe that with low supply, the mortgage rates will rise and as a result, the prices of the homes will eventually come down to prevent them from being unaffordable. In reality, there is little truth to this belief. While house prices do have an indirect relation to mortgage rates, there is no strong relationship to speak of. If the mortgage rates do go up (which they sometimes do) it is mainly as a result of the well performing economy where incomes are higher along with the amounts that people are able to afford. In other words, housing price fluctuations have more to do with the larger scale economy than the affordability of mortgage rates.
According to the Case-Schiller index, the home prices of South Florida are almost at the same levels they showed in August 2004. However, the highest peak for South Florida home prices was recorded in December, 2006. As per the current statistics, the latest prices are still 34 percent below the peak prices and it’s still a great time to buy a home. If you are looking for advice regarding your next real estate investment, consult the professionals at Frankel Realty before you buy. Call us on (561) 427-2154 today.