Despite marked fluctuations and some ominous signs, the housing markets in Miami-Dade and Broward counties appeared relatively healthy during the fourth quarter of 2018, but less so than during the same period in 2017, according to the most recent Beracha Housing Health Index.
“The market in Miami-Dade and Broward in general is expected to do OK in 2019 despite some unhealthy pockets,” said Eli Beracha, associate professor and director of FIU Business’ Hollo School of Real Estate.
Most unhealthy in the latest report is Miami-Dade’s condominium market, which posted negative index values for the fourth quarter in the $100,000 to $350,000 at -0.21; and $600,000 to $1,500,000 at -0.20. Values for properties in the $350,000 to $600,000 range remained neutral at 0.00 during the same period.
The index, sponsored by Avanti Way Real Estate, examines current housing inventory, average housing days on the market before sale, percent of selling price relative to asking price, and change in the level of housing inventory.
While the lower priced properties in Miami-Dade fared worse than in the fourth quarter of 2017, properties in the $350,000 to $600,000 and those in the $600,000 to $1,500,000 are in better shape.
The neutral and negative index values for the condo market in Miami-Dade point to a rough 2019 for their owners in terms of price appreciation. Specifically, the lower end and the higher end of the condo market are still under pressure due to new and existing inventory in the market and may experience additional price decline over the next 12 months.
“The mid-price condo market is recovering better than the low end and the high end condo market,” said Beracha, a real estate investment professor who has studied real estate trends in Miami-Dade and Broward since 2007. “The return to owners will most likely come from rent or personal enjoyment rather than price appreciation, in the near future.”
Overall, the housing market for single-family homes and condominiums in Broward remains healthy through the fourth quarter of 2018. Specifically, condominiums in the $350,000-$600,000 and $600-$1,500,000 price ranges both scored an encouraging score of 0.58 and 0.55, respectively.
In Miami-Dade, single-family homes in the $100,000-$350,000 and $350,000-$600,000 ranges posted small index declines in the last quarter, keeping the market healthy but less so than 2017. By contrast, higher-end housing saw notable index gains – from 0.14 to 0.22 and 0.39 from 0.32 respectively – indicating a strengthening market.
The index, Beracha notes, provides valuable data and guidance for home sellers and buyers alike. “A continuous influx of individuals from high tax states after the 2018 tax reform is contributing to the market in a positive way and it offsets some negative forces that stem from rising interest and mortgage rates,” he added.
Beracha is also co-author of two additional real estate indexes: The Beracha, Hardin and Johnson Buy vs. Rent Index and the Beracha, Hardin and Johnson Housing Affordability Index, both with William Hardin, associate dean of the Chapman Graduate School at FIU Business, and Ken Johnson, associate dean of graduate programs at Florida Atlantic University’s College of Business.