Mid-market Miami single-family home sales increased as prices for all properties continued their upward trend in October, according to a new report by the MIAMI Association of REALTORS® (MIAMI) and the Multiple Listing Service (MLS) system.
Sales for mid-market Miami single-family homes, or properties listed from $300,000 to $600,000, increased 18.9 percent in October, from 317 to 377.
“Miami’s evolution into a world-class global city is attracting domestic homebuyers from throughout the United States,” said Mark Sadek, a Coral Springs Realtor and the 2016 MIAMI chairman of the board. “The middle of our market continues to see growing demand. Homebuyers want to live in a young global city with top-flight art, culture, entertainment and education.”
Median sale prices for single-family homes jumped 17.0 percent, increasing from $265,000 to $310,000. Existing condos experienced 7.0 percent price growth, climbing from $200,000 to $214,000. Miami single-family home prices have risen for 59 consecutive months. Condo prices have increased in 63 of the last 65 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 interest rates are at historic lows, making buying a home more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage is 3.47 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 22.4 percent year-over-year from 2,550 to 1,980 as fewer distressed properties are available and inventory below $300,000 declines.
Single-family home sales decreased 12.9 percent year-over-year, from 1,145 sales in October 2016 to 997 last month. Existing condo sales — which are competing with a robust new construction market — decreased 30.0 percent year-over-year, from 1,405 transactions to 983.
Total sales volume accounted for $804.3 million last month, a 17.8 percent decrease from the $978.8 million 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 28.1 percent year-over-year for single-family homes priced below $300,000, from 1,844 listings to 1,325.
Distressed property sales continued to decline in Miami, a sign of the area’s strong housing market.
Total Miami distressed sales have declined 51.5 percent year-over-year, from 606 transactions in October 2015 to 294 last month. Only 14.8 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 23.8 percent in October 2015. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 3.9 and 11.0 percent, respectively, of total Miami sales in October 2016. Short sale transactions dropped 40.8 percent year-over-year while REOs fell 54.4 percent.
Nationally, distressed sales accounted for 5 percent of all sales in October, down from 6 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 was 50 days, the same as last year. The median number of days between the listing date and closing date for single-family properties increased 2.0 percent to 104 days.
For condos, the median time to contract stayed at 78 days. The median number of days between the listing date and closing date increased 1.6 percent to 125 days.
The median percent of original list price received for single-family homes declined a negligible 0.2 percent to 95.3 percent. The median percent of original list price received for existing condominiums was 93.8 percent, a decrease of 0.3 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 sales grew 2.0 percent to a seasonally adjusted annual rate of 5.60 million in October from an upwardly revised 5.49 million in September. October's sales pace is 5.9 percent above a year ago (5.29 million), according to NAR.
Statewide, closed sales of existing single-family homes totaled 20,194, down 5.3 percent from October 2015, according to Florida Realtors. Florida’s condominium sales totaled 7,955, down 12.3 percent compared to a year ago.
The national median existing-home price for all housing types in October was $232,200, up 6.0 percent from October 2015 ($219,100). October's price increase marks the 56th consecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $220,000, up 11.7 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in October was $161,000, up 8.1 percent over the year-ago figure. Statewide median sales prices for single-family homes and condos have risen for 59 consecutive months.
Miami’s Cash Buyers Represent About Twice the National Average
Miami cash transactions comprised 43.3 percent of October total closed sales, compared to 51.5 percent last year. Miami cash transactions are about double the national average of 22 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 57.2 percent of condo closings were made in cash in October compared to 29.7 percent of single-family home sales.
Balanced Market for Single-Family Homes, Buyer’s Market for Condos
Inventory of single-family homes increased 6.3 percent in October from 6,074 active listings last year to 6,459 last month. Inventory has dropped 28.1 percent year-over-year for single-family homes priced below $300,000, from 1,844 listings to 1,325. Condominium inventory increased 19.4 percent to 14,409 from 12,064 listings during the same period in 2015.
Single-family homes have a 6.0-month supply, which indicates a balanced market. Existing condominiums have a 12.6-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 October increased 15.1 percent year-over-year, from 18,138 to 20,868. Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes decreased 11.8 from 1,769 in October of last year to 1,561 last month. New listings of condominiums decreased 16.7 percent, from 2,445 to 2,036.
Nationally, total housing inventory at the end of October declined 0.5 percent to 2.02 million existing homes available for sale, and is now 4.3 percent lower than a year ago (2.11 million) and has fallen year-over-year for 17 straight months.
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.
Sixty-one condo towers with 6,343 units have been completed in Miami-Dade County east of I-95 in the last five years since the start of 2011, according to a Nov. 21 report from preconstruction condo projects website Cranespotters.com and MIAMI.
To access October 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 nearly 45,000 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 160 international organizations worldwide.