A scarcity of homes for sale is rattling buyers, emboldening sellers and pushing prices higher in South Florida.
Analysts say a market balanced equally between buyers and sellers has a six-month supply of properties, meaning that’s how long it would take to sell all of the homes if no more were listed.
At the end of June, Broward’s single-family supply stood at a paltry 3.8 months, down from 4.9 months in June 2014, according to data from the Greater Fort Lauderdale Realtors.
Palm Beach County is slightly better off but still short on for-sale signs. The county had a 4.8-month supply at the end of June, compared with 5.8 months two years ago, the Realtors Association of the Palm Beaches said.
Lack of supply is one of the main reasons why values keep rising, housing observers say. The median price for existing homes in Broward hit $325,000 in June, up 7 percent from a year earlier, while Palm Beach County‘s median increased 6 percent to $320,000.
When housing prices hit bottom in 2012, sales soared as investors and traditional buyers jumped into the market, feasting on bargains.
Properties owned by lenders or facing foreclosure dominated sales during the housing recovery, but those distressed homes have largely been cleared out of the market.
In Broward, only 257 of the 1,805 single-family home closings in June involved a foreclosure or short sale, according to the Greater Fort Lauderdale Realtors.
In Palm Beach County, Realtor board data show foreclosures and short sales represented only about 10 percent of the 1,822 closings in June.
During the worst of the housing bust, roughly half of all home sales involved a distressed property.
“Without those foreclosures in the market to induce deals, buyers are pausing because they don’t feel like they have a lot of [good] choices,” said Scott Agran, president of Lang Realty in Boca Raton.
First-time buyers Samantha Cutler and her fiance, Jason Novick, haven’t had much luck since they started their search several months ago.
The Plantation couple is looking in northwest Broward for a three- or four-bedroom home in the $300,000 to $400,000 range. Cutler and Novick hope to put down roots for the next seven to 10 years and start a family, so they want to make sure they buy in a good school district.
They’d like to be in a home before their wedding in November, but they don’t want to settle, either.
“We haven’t been blown away or seen anything that really wowed us,” said Cutler, 26, a speech language pathologist. “When you walk into the right home, I think you just know.”
Because of the shortage, homes priced fairly and in good condition generally sell quickly, real estate agents say. But some desperate buyers will even gravitate toward homes with obvious shortcomings.
Judy Trudel, an agent who works in Palm Beach and Broward, said she recently had a client wanting to sell or rent a home in the Pompano Highlands subdivision in Pompano Beach. The three-bedroom property has only one bathroom, and the yard needs major work, according to Trudel.
She said the owner insisted on listing the home for sale at an ambitious $179,900. At the same time, she listed it for rent at $1,550 a month.
“As soon as I hit the ‘send’ button, my phone did not stop ringing,” Trudel said.
The owner eventually decided to rent the home. Still, it continues to draw competitive offers, even though potential buyers know the existing tenant has a year’s lease, Trudel said.
Homes priced at $500,000 and under are most in demand, with the selection more diverse in higher price ranges.
Terry Story, an agent for Coldwell Banker in Broward and Palm Beach counties, said the crop of current listings is littered with overpriced properties.
“There’s still a disconnect between what the buyer thinks the home is worth and what the seller thinks the home is worth,” Story said. “We need more well-priced inventory — not overpriced, poor-condition homes.”
Matt and Kenia Forget, Story’s clients, weren’t impressed with their selection of homes, though they finally found one they liked in Boca Raton and are set to close Aug. 9.
“You’d think the houses would be in a little better shape for the prices people are asking,” said Matt Forget, a 35-year-old architect. “A lot of houses in east Boca needed $50,000 or $60,000 worth of work, and you’re still left with a 50-year-old house.”
Rising prices are restoring equity lost during the housing crisis, and that will prompt more owners to test the market. But there’s no single event that will boost moderately priced listings in South Florida to match the level of demand, said Ron Shuffield, president of EWM Realty International in Miami-Dade and Broward.
Trent Swift, a 31-year-old attorney, said homes he and fiancee Jessica Fontaine have looked at in central Palm Beach County are either “gone in the blink of an eye or overpriced.”
They’re looking for three- or four-bedroom homes from $350,000 to $550,000, though they’re learning to adjust their expectations and remain open-minded because quality listings are so limited.
They had their hopes up for a home in the College Park section of Lake Worth and made arrangements for a showing on Friday, only to find out minutes later that it had just gone under contract to someone else.
Swift said he’s encouraged by stories of friends who faced similar house-hunting woes. In almost all of those cases, when one deal fell through, a better one came along.
“I feel like the universe does have a plan,” Swift said, “but it’s just going to take awhile.”
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