The Facts About South Florida Housing Trends

By FIU Metropolitan Center Director Dr. Dario Moreno

The Metropolitan Center is at the heart of identifying the issues and trends surrounding South Florida’s housing crisis. We recently conducted a study for The Greater Miami Chamber of Commerce and will be conducting a regional housing study on foreclosures for the Regional Business Alliance this Fall.

Clearly, South Florida’s housing crisis has been exacerbated by a surplus of unaffordable condominiums and single family homes in the Tri-County area of Palm Beach, Broward, and Miami-Dade counties. The crisis has also affected rental markets where condo conversions and a decrease in construction have pushed rents beyond what most residents are able to pay. Here are a few key facts about how we got to where we are today:

• The number of housing permits in the three counties decreased by 80%, 50%, and 70%, respectively from 2005 to 2007. While the number of multi-family units decreased by a higher percentage than those issued for single-family units in each county except in Broward.

• The sales of single-family homes increased in all three counties; growing by 35% in Broward and 60% in Palm Beach, from 1997 to 2004, this despite a doubling of the median sales price. From 2005 to 2007 single-family units decreased by about 50% in all three counties despite relatively low or negative price increases.

• In Miami-Dade County, new condominium sales prices increased by as much as 30% even as the overall sales plummeted in the last quarter of 2007. In Broward County, sales declined by 60% in the last quarter of 2007 and prices decreased by 5%. In Palm Beach County, the price of new condos increased despite a 60% decline in sales in 2007.

Based on this data, it is evident that the market is not in equilibrium. If market prices do not drop to the point where the supply for these units equals the demand, then the number of housing permits issued in South Florida will continue to decline.