B
roward County's residential real estate market continued to slow in May, with total home sales plummeting 18% year-over-year due to high mortgage rates and strict lending rules. According to the Miami Association of Realtors, total residential transactions dropped to 2,124 from 2,583 a year earlier.

    Single-family home sales declined 11%, while condo sales took an even harder hit, falling 24%. This sharp drop underscores a cooling market after years of record growth. "Sales have remained weak with mortgage rates hovering near 7%," said Gay Cororaton, chief economist for Miami Realtors. "However, affordability conditions are expected to improve in the second half of the year."

    The condo market has shown signs of price compression, with the median condo price dipping 2.5% year-over-year to $275,000. Statewide, condo prices fared worse, dropping 6.1%. Single-family home prices remained flat at $625,000, but that figure marks a 115.5% surge compared to May 2015.

    The limited availability of FHA financing continues to hinder potential buyers in the condo market. Only 21 condominium buildings across Miami-Dade, Broward, and Palm Beach counties are approved for FHA loans, less than 1% of the total. Florida's requirement for a 25% down payment on condos under limited review rules without sufficient reserves adds to the challenge.

    Despite weaker demand, inventory is increasing. Total active listings in Broward County rose 35.9% to 17,959 homes in May from 13,219 a year ago. However, condo inventory remains below pre-pandemic levels, and new listings for Miami-area condos fell 8.3% year-over-year.

    The months' supply of inventory in Broward is now at 5.9 months for single-family homes and 12.5 months for condos, suggesting a shift to a buyer's market. Distressed sales remained minimal, accounting for just 0.7% of all closings in May. Homes are taking longer to sell, with single-family listings averaging 38 days from list to contract and condos taking even longer.

    Cash still dominates the condo market, accounting for 35% of Broward closings in May. Cash buyers were especially prevalent in the condo market, where they represented half of all transactions. Economists and real estate professionals are closely watching Fed policy for signals on when relief might arrive for buyers sidelined by borrowing costs.