Last week, we received the latest real estate numbers for 2019 from the National Association of Realtors. For South Florida, the report was exceptional. The total home sales in Broward jumped 14%, while Miami-Dade sales were up 16% year over year and Palm Beach County saw a 20% increase. Be mindful that even three percent growth in any economic category is outstanding. For huge double-digit increases to be occurring, that deserves a deeper dive. As I did, the news just kept getting better.
In Broward, home sales weren’t just up by 14%. Prices also increased an average of 13% for condos and 9% for single-family homes. In Miami-Dade, the 16% sales increase came with a 4% increase in condo prices and a 7% increase in home prices. Palm Beach County posted the biggest sales boom of all, with a 20% increase. Plus, we saw prices jump 6% for both condos and homes. So, what’s driving this and what does all of this mean?
We’ve talked extensively about the mass relocation to Florida from especially high tax states. Recent estimates from the Florida Chamber suggest Florida will see an increase from about 640 new residents daily in 2019 to 900 in 2020. Based on the December sales numbers, that might be conservative. Buying by yearend enables new owners to apply for homestead protection. This is not only of benefit for those who choose South Florida as their primary home but also to provide as documentation to leave existing high taxes states like New York, which don’t make it easy to leave. Other factors that contributed to the huge sales boom were low-interest rates, near all-time lows at just above 3.5% and the record performance of the stock market. Record stock market performance has historically been a catalyst for real estate as investors take profits and look to put realized gains to use. Additionally, Friday's news from the Florida Department of Economic Opportunity, spelling out a record low unemployment rate for Florida 3% and South Florida, 2.2% is the icing on the economic cake supporting our local real estate market.
It’s hard to oversell how impressive the South Florida real estate story is entering 2020 and it’s a clear indication that our local economy will only continue impressive growth throughout the year. As for renters, this is the latest reminder that renting rather than buying is a terrible idea if you intend to remain in place for a minimum of three years. For the average American, 80% of one’s net worth is comprised of home equity. If you don’t own your home, there goes that 80%, straight to your landlord.
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