A barometer of South Florida house prices increased in May for a 17th consecutive month. The Standard & Poor’s/Case-Shiller index, released Tuesday, rose 14.2 percent from a year ago.
Case-Shiller measures Palm Beach, Broward and Miami-Dade counties and 19 other major metropolitan areas. All 20 posted annual price gains, with Dallas and Denver exceeding peaks established before the Great Recession.
San Francisco led the nation with a 24.5 percent increase, followed by Las Vegas (23.3 percent) and Phoenix (20.6).
South Florida and much of the country have too little supply to satisfy intense demand. Investors are scooping up homes in large numbers, often shutting out first-time buyers looking to take advantage of still-low mortgage rates.
Guy Cecala, publisher of the Inside Mortgage Finance newsletter, said more balance between buyers and sellers will help moderate the large price gains – a necessary part of a long-term housing recovery, he said.
“When you get big price spikes, that sets you up for a dip,” he said. “San Francisco at 24.5 percent is not sustainable.”
The index tracks prices of the same house over time. Some analysts say that's a better measure of the market than median prices of homes sold in a given month. But Case-Shiller does not include prices for condos and trails Realtor board data by a month.
Last week, the Greater Fort Lauderdale Realtors said Broward County’s median price in June was $265,000, a 23 percent increase from a year ago. In Palm Beach County, the median last month was $259,990, up 16 percent from a year earlier, according to the Realtors Association of the Palm Beaches.
Bo Mastykaz, a South Florida real estate agent for Redfin, said buyers who need financing find the market particularly frustrating.
“The sellers are just not accepting my offers,” he said. “They’re waiting for straight cash.”
Analysts say local and national markets will cool off in the second half of the year as mortgage rates rise and large investment firms lose interest due to higher prices.
Mike Larson, an analyst for Weiss Research in Jupiter, said there’s no danger of another downturn. But he doesn't expect prices to keep rising at current levels because incomes aren’t keeping pace.
“I think if you poll your co-workers, friends and family, they won’t be talking about 14 percent raises,” he said.