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Lack of supply pushing up property prices in South Florida

Buyer activity in South Florida’s housing market has picked up this year but the lack of homes for sale is pushing up house prices. 

The supply-demand imbalance in the residential property market means that, according to data provided by the Greater Fort Lauderdale Realtors, Broward’s single-family supply stood at just 3.8 months in July, down from 4.9 months in June 2014, and significantly below the six months that analysts say that it should take to sell all of the homes if no more were listed.

Palm Beach County is slightly better off but still short of the volume of homes needed to meet growing demand. 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.

The shortage of housing supply has contributed to the 7% increase in property prices in Broward over the past 12 months, with the average price of a home in region now stood at $325,000 (£244400), while Palm Beach County's median increased 6% to $320,000 (£241,000).

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, with just over 400 single-family home closings in Broward and Palm Beach County in June involving a foreclosure or short sale.  

“Without those foreclosures in the market to induce deals, some 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.

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