Once red-hot, South Florida’s real estate market is in a months-long slump — here’s why

Whether it’s a market meltdown or a much-needed course correction, dismal home sales in South Florida are sticking around. 

New data compiled by the Miami Association of Realtors reflects a once-hot market in a persistent state of rebalancing. The dollar volume of sales across Miami-Dade, Broward and Palm Beach counties clocked in at $5.6 billion in May — a marked decline from $6.1 billion last May, the Real Deal reported.

“It’s a validation of what we’ve anticipated and seen in the marketplace over the past few months, maybe even the last couple of years,” Miami-based broker Mick Duchon of Corcoran told The Post. “Since interest rates peaked, we’ve seen a slowdown across the market, especially in parts of the commoditized condo space.”

New waterfront villas and glittering penthouse condos are still selling at a healthy pace, but success in that corner is tempered by the grim realities of the middle market — namely condos. 

While cash-rich luxury buyers can afford to breeze through the market, the average South Florida buyer is still chafing at high mortgage rates and insurance costs. New upkeep requirements on condos following the fatal 2021 Surfside condominium collapse are making older units increasingly difficult to sell.

Miami-area sales dropped 20% compared to May of last year, according to the Miami Association of Realtors. Condo sales took a particular hit with a 25% dive. Nearby Broward County, which encompasses Fort Lauderdale, saw a 18% drop in sales, with a 24% dip in condo closings. 

Real estate insiders confirmed a steady decline in the housing market in recent months, but told The Post that numbers vary wildly across South Florida’s polarized housing stock, from embattled, aging condos to attractive, multimillion-dollar new builds.

“There’s different generations of our market, particularly Miami Beach,” Miltiadis Kastanis of Compass told The Post.

“There’s pre-COVID and post-COVID. And there’s pre-Surfside collapse and post-Surfside collapse,” Kastanis added. “Those are two monumental happenings that have adjusted our real estate market, because people are less inclined to buy in an older, aging building.”

Relief for the condo market is on the horizon, however. Governor Ron DeSantis signed legislation this week to ease the burden of rising fees and regulations on condo homeowner associations.

The supply of affordable homes under $400,000 across the region remains tight. Median prices in Miami-Dade rose year-over-year from $650,000 to $675,000 — the 162nd consecutive month of price appreciation since December 2011. 

The single-family market in Miami-Dade County was a rare bright spot in the Miami Realtors report, charting 4% price growth, but sales still declined. In nearly all other markets and categories, prices declined alongside sales. 

A confluence of seasonal slowdowns, rate-wary buyers and oppressive condo rules have made for a stormy outlook in South Florida. Even the Palm Beach market saw a 12% decline in sales year-over-year. 

Johnny DelPrete at Douglas Elliman, based in the northern area of Palm Beach County, characterized the downturn as a period of stabilization. DelPrete said Palm Beach sellers and buyers are on more equal footing than they were in the recent past. 

“I think the best way to summarize the current market is that it’s just normalizing,” DelPrete said. “We had that huge surge from the pandemic, then went from no inventory to now having months and months of inventory.”

While demand is ever-present, Duchon said, the brokers manage expectations of wary buyers and eager sellers.

“Oftentimes, people will pick out one deal over the past four years and try and meet that sale,” Duchon said. “When, in order to sell today, we have to adjust the price to the market.”