Despite marked fluctuations and some ominous signs, the housing market in Miami-Dade and Broward counties appeared relatively healthy during the third quarter of 2018, according to the most recent Beracha Housing Health Index.
The quarterly index is produced by Eli Beracha, associate professor and director of FIU Business’ Hollo School of Real Estate, and sponsored by Avanti Way Realty. In each county, the index suggests what is likely to happen to home pricing in the next year for single-family and condominiums, separately, across three price ranges – $100,000-$350,000, $350,000-$600,000 and $600,000-$1,500,000.
The index considers 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. Also factored in are the momentum in housing price appreciation and the number of properties sold, or pending sales, relative to current inventory.
Most unhealthy in the latest report is Miami-Dade’s condominium market, which posted negative index values for the third quarter across the three price ranges – $100,000 to $350,000 at -0.18; $350,000 – $600,000 at -0.06; and $600,000 to $1,500,000 at -0.05.
The numbers suggest anemic future price appreciation or price declines in the next 12 months for the lower-priced properties in Miami-Dade. That said, index values in the pricier condominiums are smaller versus the third quarter of 2017, indicating that the market is stabilizing.
“For luxury condos, the significant decline in pricing is mostly behind us,” said Beracha, a real estate investment professor who has studied real estate trends in Miami-Dade and Broward since 2007. “The standings around zero don’t necessarily mean the market will be strong from here on. We might see slow improvement or even a slight decline, but it’s not as unhealthy as it was a year ago.”
Overall, the housing market for single-family homes in Broward remains healthy albeit less so than in 2017. Condominiums in the $350,000-$600,000 and $600-$1,500,000 price ranges turned the corner from negative territory to positive gains, the Index shows.
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 year, keeping the market healthy but less so than 2017. By contrast, higher-end housing saw notable Index gains, indicating a strengthening market.
The index, Beracha notes, provides valuable data and guidance for home sellers and buyers alike.
“In an unhealthy market, sellers should accept most reasonable price offers because waiting too long will likely result in lower offers at a future point” said Beracha. “If the market is healthy, patience will serve sellers best by increasing the likelihood of a higher offer.”
In addition to this index, Beracha is 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 G. Hardin, director of FIU’s Jerome Bain Real Estate Institute and 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