South Florida home prices soared in May, again posting double-digit gains amid strong demand from cash buyers and slim pickings of properties.
Palm Beach County’s median price for existing homes last month hit $263,750, a 29 percent increase from a year earlier, the Realtors Association of the Palm Beaches said Thursday. The county’s median price for existing condominiums rose 21 percent to $119,000.
Broward County’s median price was $255,000, 23 percent higher than May 2012, according to the Greater Fort Lauderdale Realtors. Broward’s median price for condos increased 28 percent to $108,000.
"It’s a crazy housing market -- crazy,” said Amanda Wilson, a real estate agent with Esslinger Wooten Maxwell in Fort Lauderdale.
Palm Beach County had 1,472 homes change hands last month, a 14 percent increase from a year earlier. More than half the sales – 762 -- were all cash.
In Broward, there were 1,460 sales, including 623 cash deals. Sales increased 17 percent from a year earlier.
Some real estate observers worry about another housing bubble, given the fast-rising prices over the past six months. They say the abundance of cash buyers is artificially pushing prices higher, even as incomes remain stagnant.
"This is where you have to start being concerned again," said Mike Larson, a housing analyst at Weiss Research in Jupiter.
Others disagree. They point out that investors aren't buying for speculative reasons as they did during the housing boom, while lenders are being careful about underwriting mortgages so that only qualified buyers enter the market.
Despite the recent surge, values remain far below boom-era levels, said Jed Kolko, chief economist for real estate website Trulia.com. Palm Beach County homes still are undervalued by 11 percent, while Broward County homes are undervalued by 8 percent, Trulia said.
“Is there a bubble? The answer is no,” Kolko said. “Prices would have to rise a lot more before we’re back in bubble territory.”
But the market is undeniably hot, in large part because of the lack of homes for sale.
Palm Beach County's supply is down 44 percent from a year ago, while Broward's inventory is off 20 percent, Realtor board data show.
Many owners can’t sell because they’re underwater on their mortgages, while others choose not to list their homes until prices rise even more.
Real estate agents say they can’t get their clients to tour homes fast enough. And bidding wars happen on any reasonably priced property, agents say.
Given the competition, even cash buyers find they don’t have the advantage they once did.
“I have a client that’s been looking for three weeks,” said Robyn Jackson, South Florida area manager for the Redfin brokerage. “They sold their house in a day, they have $1 million cash, and I can’t find them anything. Everybody has cash now.”