Mid-market Miami single-family home sales increased as prices for all properties continued their upward trend in September, according to a new report by the MIAMI Association of REALTORS® (MIAMI) and the Multiple Listing Service (MLS) system.
Total Miami-Dade County single-family home sales decreased 10.8 percent, from 1,195 to 1,066, in September as fewer distressed properties are available and inventory below $300,000 declines. But mid-market Miami homes, or properties listed from $300,000 to $600,000, saw inventory growth and posted a 5.1 percent increase in sales, from 396 to 416.
“Miami is home to one of the fastest-growing urban cores in the world, and homebuyers want to own their piece of paradise,” said Mark Sadek, a Coral Springs Realtor and the 2016 MIAMI chairman of the board. “Miami’s strong fundamentals — consistent job gains, population growth and affordable mortgage rates — continue to positively impact the local market.”
Median sale prices for single-family homes jumped 10.4 percent, increasing from $285,000 to $314,500. Existing condos experienced 9.2 percent price growth, climbing from $200,500 to $219,000. Miami single-family home prices have risen for 58 consecutive months. Condo prices have increased in 62 of the last 64 months, a streak spanning more than five years.
Despite the increased prices, Miami properties remain at 2005 price levels and at a major bargain compared to other global cities. A 120-square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average, according to the National Association of REALTORS® (NAR). London ($960,840), Hong Kong ($776,280), and New York ($1.6 million) prices are at least five times higher.
Mortgage rates remain at historic lows. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage is 3.46 percent.
Total Sales Decline But Remain in Line with Historical Averages
Total existing Miami-Dade County residential sales — which posted a record year in 2013 and near record years in 2014 and 2015 — decreased 14.7 percent year-over-year from 2,498 to 2,130.
Existing condo sales — which are competing with a robust new construction market — decreased 18.3 percent year-over-year, from 1,303 transactions to 1,064.
Total sales volume accounted for $864.7 million last month, a 15.2 percent decrease from the $1.02 billion sales volume a year ago. The sales do not include Miami’s multi-billion dollar new construction condo market.
Inventory shortage for properties priced below $300,000 continues to impact sales. Inventory has dropped 32.4 percent year-over-year for single-family homes priced below $300,000, from 1,844 listings to 1,247.
Distressed sales comprise a smaller part of today’s market. Total Miami distressed sales have declined 42.4 percent year-over-year, from 608 transactions in September 2015 to 350 last month. Only 16.4 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 24.3 percent in September 2015. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 3.0 and 13.3 percent, respectively, of total Miami sales in September 2016. Short sale transactions dropped 46.8 percent year-over-year while REOs fell 41.3 percent.
Nationally, distressed sales fell to a new low of 4 percent in September (since NAR began tracking in October 2008), down from 7 percent a year ago.
Miami Real Estate Selling Fast and Close to List Price
The median number of days between listing and contract dates for Miami single-family home sales fell 11.8 percent year-over-year to 45 days. The median number of days between the listing date and closing date for single-family properties decreased 1.0 percent to 101 days.
For condos, the median time to contract increased 1.4 percent year-over-year to 73 days. The median number of days between the listing date and closing date increased 3.3 percent to 124 days.
The median percent of original list price received for single-family homes was 95.7 percent in September 2016, the same percentage from a year ago. The median percent of original list price received for existing condominiums was 93.5 percent, a decrease of 1.0 percent.
Lack of Condo Financing Continues to Impact Sales
In addition to competing sales from new construction units, the lack of access to mortgage loans is also impacting existing condominiums. Of the 9,307 condominium buildings in Miami-Dade and Broward Counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to statistics from the Florida Department of Business and Professional Regulation and FHA.
National and State Statistics
Nationally, total existing-home increased 3.2 percent to a seasonally adjusted annual rate of 5.47 million in September from a downwardly revised 5.30 million in August. After last month's gain, sales are at their highest pace since June (5.57 million) and are 0.6 percent above a year ago (5.44 million).
Statewide, closed sales of existing single-family homes totaled 22,704 last month, slightly down (0.5 percent) from September 2015, according to Florida Realtors. Florida’s condominium sales totaled 8,818 last month, down 3.9 percent compared to a year ago.
The national median existing-home price for all housing types in September was $234,200, up 5.6 percent from September 2015 ($221,700). September's price increase marks the 55thconsecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $222,500, up 11.3 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in September was $160,000, up 6.7 percent over the year-ago figure. Statewide median sales prices for single-family homes and condos have risen for 58 consecutive months.
Miami’s Cash Buyers Represent More than Twice the National Average
Miami cash transactions comprised 42.9 percent of September total closed sales, compared to 48.7 percent last year. Miami cash transactions are double the national average of 21 percent. Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami’s cash purchases as 57.4 percent of condo closings were made in cash in September compared to 28.5 percent of single-family home sales.
Seller’s Market for Single-Family Homes, Buyer’s Market for Condos
Inventory of single-family homes increased 8.0 percent in September from 5,894 active listings last year to 6,368 last month. Inventory has dropped 32.4 percent year-over-year for single-family homes priced below $300,000, from 1,844 listings to 1,247. Condominium inventory increased 20.5 percent to 14,107 from 11,710 listings during the same period in 2015.
Single-family homes have a 5.8-month supply, which indicates a sellers’ market. Existing condominiums have an 11.9-month supply, which indicates a buyers’ market. A balanced market between buyers and sellers offers between six and nine months supply of inventory.
Total active listings at the end of September increased 16.3 percent year-over-year, from 17,604 to 20,475. Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes increased 2.7 percent from 1,703 in September of last year to 1,749 last month. New listings of condominiums decreased 3.4 percent, from 2,251 to 2,175.
Nationally, total housing inventory at the end of September rose 1.5 percent to 2.04 million existing homes available for sale, but is still 6.8 percent lower than a year ago (2.19 million) and has now fallen year-over-year for 16 straight months. Unsold inventory is at a 4.5-month supply at the current sales pace, which is down from 4.6 months in August.
New Construction Market Update
Most Miami preconstruction condo developers require a 50-percent cash deposit on new units. The deposit is not only one of the highest in the United States but is significantly higher than the 20 percent required during the last real estate cycle. The large cash deposits show how committed Miami’s preconstruction condo buyers are to the local market.
Fifty-eight condo towers with 5,791 units have been completed in Miami-Dade County east of I-95 in the last five years since the start of 2011, according to an Oct. 17 report from preconstruction condo projects website Cranespotters.com and MIAMI.
To access September 2016 Miami-Dade Statistical Reports, visit www.SFMarketIntel.com
Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.
About the MIAMI Association of REALTORS®
The MIAMI Association of REALTORS® was chartered by the National Association of Realtors in 1920 and is celebrating 96 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward Council, the Jupiter Tequesta Hobe Sound (JTHS) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents more than 44,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S., and has official partnerships with 137 international organizations worldwide. MIAMI’s official website is www.miamire.com