ADVERTISEMENT

Luxury home sales stall after pandemic spike

ADVERTISEMENT

Sales of single-family homes in South Florida priced at $1 million and above have basically been flat since the third quarter of 2021, but remain higher than pre-pandemic levels.

FORT LAUDERDALE, Fla. – After a breakneck housing market during most of the pandemic that hit record highs, luxury single-family home sales have leveled off for three straight quarters.

According to data from the Keyes/Illustrated Luxury Report, luxury sales in South Florida (which stretches from Miami-Dade County to the Treasure Coast), meaning single-family homes selling for $1 million or more , have remained essentially stagnant since the third quarter of last year. year.

ADVERTISEMENT

Looking at the past two years of South Florida real estate action, sales volume increased during the start of the pandemic housing surge in June 2020, before reaching the highest levels yet in the second quarter of 2021 and then stabilize. However, the numbers are still significantly higher than pre-pandemic sales.

“I think there is no question that June 2020 to 2021 was the biggest spike in Covid accelerated buying,” said Mike Pappas, CEO of Keyes Realty in South Florida. “It was led by the luxury market and those who had funds and the ability to move.”

For the first quarter of 2022, luxury single-family home sales volume in terms of price in South Florida reached $5,564,861,079, a decrease of 3.2% from the same quarter of the previous year, when the total sales volume in price terms reached $5,750,323,765, reports the report. Show.

Single-family home sales volume peaked in the second quarter of 2021, when total sales for South Florida were $8,206,236,421.

Pappas theorizes that the three-quarter plateau could be due to two things: settling into a more normal market and a severe lack of inventory.

“I would say this is another sign that we are approaching the peak of the real estate cycle,” said Ken H. Johnson, a real estate economist at Florida Atlantic University. “We started at the bottom of the cycle in 2012 and have been on the upswing for about ten years.”

The gross sales number also seems to have started to stabilize. Total single-family home sales for the first quarter of 2022 were 1,949, a small 2% increase from the same quarter last year, when total sales were 1,909.

“Sales have stalled in this market largely due to lack of inventory,” said Bonnie Heatzig, executive director of luxury sales for Douglas Elliman in Boca Raton. “More inventory coming to market would break the plateau and sales levels would increase to match the very high demand circulating in our luxury market.”

It noted a slight “buyers’ respite” in the first quarter of 2022, which could be attributed to rising interest rates, rising inflation and geopolitical conflicts. He also says that he has seen an increase in buyers as the market approaches the second quarter of the year, South Florida’s traditional peak season for real estate sales.

From his perspective, he says buyers are beginning to understand that prices will remain high for the foreseeable future.

Luxury condominiums are a different story. Units priced at a million and above have started to see significant increases in the first quarter of this year. Total luxury condominium sales volume increased to $3,683,915,489, an increase of 39% from the prior year quarter. The number of sales also increased to 1,433, an increase of 31% from the previous year.

Pappas’s assessment of the rise of high-end condos is that some buyers have shied away from condos due to concerns about closings and not being able to use amenities, and that reluctance is fading.

“There is confidence in the condo market again,” Pappas said.

© 2022 Sun-Sentinel of South Florida. Distributed by Tribune Content Agency, LLC.

sniloans