Interview: Patrick Simm, Broward

Sales, price increases set to continue amid inventory shortgage, high demand and low interest rates

Broward President – Miami Association of Realtors

How has real estate performed in Broward County? Business has been robust. All three counties — MiamiDade, Broward and Palm Beach — experienced increased growth but we’re the county in between. We’re close to both seaports and both airports. The market in South Florida has been short of inventory but we have a lot of buyers. I believe post-COVID, things will even out. When COVID first hit last March, we had a two-month low but after that, demand picked up as if nothing had ever happened. Demand became even more fierce at the end of the year.

Single-family home prices increased in Broward County by 13.2% year-over-year in December 2020, along with a significant increase in sales. We expect this trend to continue and to increase further because of the inventory shortage and high demand coupled with low interest.

What is contributing to Broward’s real estate growth? The trend, due to the pandemic, of people looking for more space and more breathing room is coming into play. Everything is becoming virtual and many are working from a home office. Broward County has an affordability factor versus Miami and Palm Beach. Certain areas of Broward County are still affordable. COVID-19 accelerated migration trends that had ultrahigh-net-worth individuals from high-tax areas moving to South Florida. Buyers from high-density areas took advantage of remote work and learned to purchase larger properties for less while enjoying South Florida’s warm weather and enviable lifestyle. Low interest rates will also continue to fuel the market. It allows buyers who would otherwise not be able to afford a home to do so. Buyers can get larger homes with lower mortgage payments.

How does the association work to keep housing a ordable? For years, our public policy team has been advocating for changes to assist with housing affordability. Our market is fortunate to have a healthy supply of condominiums that our workforce can afford; the issue is the down payment. Fannie Mae and Freddie Mac have geographic-specific condo considerations for Florida. They will only lend 75% of the loan-to-value (LTV) for condos with limitations, such as no (or low) budget reserves, leaving first-time homebuyers scrambling to find the remaining 25% for a down payment. That same buyer purchasing a condo in any of the other 49 states or U.S. territories would be able to receive 90% LTV, thus only having to save 10% for a down payment. On a $200,000 purchase, we’re talking about a $30,000 difference. This is one of the biggest barriers to entry for affordable homeownership.