It was not too long ago when Americans were fleeing multi-family housing across the nation. Instead they were in search of single-family homes in the suburbs that offered more space that was conducive to social distancing. Although the single-family home market is still extremely strong, more people are once again entering the South Florida condo market. As you can imagine, the main reason for this is the overall optimistic attitude towards the rollout of the various COVID-19 vaccines. In addition, the single-family home inventory is incredibly tight right now. Add in the record numbers of Americans migrating to The Sunshine State and the result is increased condo sales again. As an example, a buyer in Boca Raton recently paid $10 million for a penthouse condo that will not be completed until 2022. This particular unit had a bidding war on it and this sale marked a new record for the downtown Boca Raton, FL market.
What does the data show?
Monthly year-over-year sales figures for February 2021 released by the Broward, Palm Beaches & St. Lucie Realtors Associations show closed sales, median sales prices, and dollar volumes to have all increased over the last several months. In Broward County, closed sales of condos and townhomes in February 2021 increased 22.8% to 1,451. As for Palm Beach County, closed sales rose to 1,107, or 9.1%, with the dollar volume rising to $482.1 million from $337.5 million. This was equivalent to a 43% jump in dollar volume.
According to a new report released by Florida Atlantic University and Florida International University, South Florida real estate values remain overvalued by approximately 11%. Of course, with mortgage rates remaining extremely low and a continual influx of new residents moving to the area, price appreciation continues. With this said, mortgage rates have been on the rise. At 3.09% last week, these are the highest rates that we have seen since June 2020. Most believe that headwinds in the real estate market are not truly felt until mortgage rates reach 4% or higher.
It has been well documented on this site that many Americans from high-tax states are migrating to The Sunshine State. In South Florida in particular, this has been a major reason for the robust price appreciation in housing. In the past, most Americans migrating to South Florida were retirees. Now, we are seeing an increasing percentage of younger professionals opting to work remotely from paradise while saving themselves significant income and even property tax dollars.
If you are considering a relocation to South Florida, we can help. At Live South Florida Realty, Inc. we have assisted many clients from all over the country find their slice of paradise. When you are ready to change your coordinates, contact us!