Until recently, I thought it might be considered to be in bad taste to report or even comment on real estate here in South Florida, given the other realities with which people have been faced. However, since we may have to adapt to a “new normal” – at least in the short run – I thought you might be interested in what’s been happening with the numbers here in Our Fair City. The business of buying and selling homes goes on, after all.
This article will concentrate on pricing trends – the dollars and cents of it. In a future column I will discuss sales counts and the all-important “inventory” metric.
Take a look at Chart One, where I have shown the changes in overall Island City pricing going back to the first quarter of 2013. The solid blue line is the 50th percentile or median – half the sales were above that price level, and half below. In addition, I am showing dashed lines for the core range of pricing – called in statistics the “intraquartile range” – with the green dashed line the 75th percentile and the red dashed line the 25th percentile.
The constant upward trend in valuation is readily apparent. In the first quarter of 2013 the median sale price of a single-family home in Wilton Manors was $309,000. In the second quarter of 2020 – the quarter ended on this past June 30th – the median sale price had increased to $523,000.
In other words, the median price increased by 69 percent over that seven-year period. That’s 7.5% per year on a compound annual basis.
Now let’s consider Chart Two, which shows the median prices for the three main Wilton neighborhoods – West (meaning west of Andrews), Center (Andrews to the train tracks), and East (east of the train tracks). Here we can see that pricing in East Wilton consistently tracks above the other two neighborhoods by roughly $100,000. Something to note here is the rather sharp drop in East Wilton pricing in the last year, particularly in the last six months. This is worthy of further investigation.
What does this mean for the typical Wilton homeowner? Well, suppose you bought the typical house in Center Wilton in early 2013, and sold it this year. If you put 10% down and took a 30-year mortgage, after paying closing costs and real estate commissions you would have made an eye-popping 527% on your capital invested – about 30% per year, compounded.
You can make a lot of money in real estate – IF you buy at the right time and prices go up.
James Oaksun, Florida's Real Estate Geek(SM), is Broker-Owner of New Realty Concepts in Fort Lauderdale. In addition to having degrees from Dartmouth and Cornell, he is a Graduate of the Realtor Institute (GRI).