Despite strong sales in the market overall for much of the quarter, the five counties that make up the South Florida region saw slower sales in the luxury home and condo market during the second quarter, according to a July 12 report from The Keyes Company.
Single-family home sales priced above $1 million fell by 2.6 percent compared to Q2 2018, to 951 total. The median price of those sales was also down 1.5 percent year-over-year, finishing the quarter at $1.63 million.
Luxury condos and townhomes saw a more pronounced drop-off in sales. With 466 closings above $1 million last quarter, sales in this category were down 21 percent from the same period last year. The median price also fell 4.8 percent to $1.5 million.
The slowdown in luxury sales locally mirrors a broader national trend. There is generally an oversupply of high-end homes relative to current demand, while mid-tier and entry-level listings face shortages.
“While South Florida’s luxury market consistently outperforms the national market, it is not entirely immune from the decline in high-end sales occurring nationally,” said Keyes President and CEO Mike Pappas. “During the second quarter, we saw the short-term impact of oversupply issues. But we still expect to see sales pick up throughout the region in the second half of 2019, as sellers adjust to today’s pricing.”
Palm Beach County was one of the only markets to register luxury sales growth. Single-family home sales priced above $1 million in Palm Beach grew 7 percent, while all-cash transactions were up almost 16 percent. Pappas expects the rest of South Florida’s luxury market to follow later this year as mortgage rates move lower.
“When the interest rate rose to 5 percent in October 2018, it essentially shut down the market,” Pappas said. “There has been a one-point drop since then and the promise from the Federal Reserve to drop rates further.”