Broward County Real Estate Inventory Drops

For well over a year now, inventories of homes for sale in Broward County (along with most metro Florida Counties) have been rising, while at the same time sales have declined. This has resulted in an excessive inventory buildup which has created a great range of choices and bargaining opportunities for Buyers that had not been available for several years before. However, this also left many Sellers waiting for months for a "real" offer on their property, if one ever came at all.

In spite of this inventory glut, property prices have not retreated as much as might be expected. In fact, some areas have actually seen price increases. Overall however, prices have come down over the past 18 months, especially in the condo market, where the inventory to sale ratio is the worst.

One key factor necessary in working toward a balanced market is reducing the large inventory of properties currently on the market. The other primary factor is increasing the number of Buyers. So far there has been little evidence of change in the various reasons largely responsible for the less than normal amount of Buyers actively in the market. There has also been little change in the number of new Sellers putting their homes on the market - However in spite of this, and for the first time since the market slide began around 18 months ago, inventories in Broward County have started to decrease. This current phenomnon is primarily the result of Sellers giving up on selling their homes for now and either cancelling their listings, letting them expire and not renewing the listings, or changing from trying to sell their property to renting it out for now.

For the first 23 days in June 2007, there were 2428 single family homes newly listed for sale, and 2877 condos newly listed for sale in Broward County. During this same period of time, 565 single family homes went under contract for sale and 552 condos went under contract for sale in Broward County.

This means that for every single family home that sold in the first 23 days of June, 4.3 new single family home listings were added to the market - and for every condo that sold in this time period, 5.2 new condo listings were added to the market. In spite of these figures however, the overall inventory of both single family homes and condos for sale actually declined.

This is because during this period, 954 single family home listings were cancelled or withdrawn and 1066 expired - resulting in a net inventory reduction of 157. Condo inventory declined even more with 1037 condo listings being cancelled or withdrawn and 1738 expiring for a net inventory reduction of 450.

This is a positive step, albeit a small one. This reduction of 157 in Broward single family home listings leaves us with a current inventory of 16,775 homes. The reduction of 450 condo listings leaves Broward County with a current inventory of 23,442. The decrease in single family home listings of 0.9% and condo listings of 1.9% may not sound like much, but it is at least a start in the right direction.

At the current level of inventory/sales, if no more properties were listed for sale and none were removed, it would take 28 months to sell off the existing inventory of single family homes and 41 months to sell off the current condo inventory. If inventories continue to creep down and Buyer activity gradually increases as prices stabilize at more affordable levels, new property tax adjustments begin to take effect and Buyer confidence in the market increases, the inventory to sales ratios can quickly move toward a more balanced and healthy market.

How long this will take remains to be seen, but we may be at the very beginning of a gradual turnaround now. Let's just hope it continues.