Miami Condo Prices Continue to Rise, Up Annually 15 Percent in July
According to the Miami Association of Realtors, residential properties in the greater Miami area have experienced almost five years of price appreciation as existing single-family homes and condominiums continue selling close to list price.
Median sale prices for existing Miami-Dade County single-family homes rose 7.9 percent in July to $299,000, according to the newly-released data. Existing condominiums increased 15.4 percent to $225,000. Single-family home prices have risen for 56 consecutive months. Condo prices have increased in 60 of the last 62 months.
"A world-class global city with a diverse economy, Miami has seen consistent residential price growth in the last five years," said Mark Sadek, the 2016 MIAMI chairman of the board. "The price appreciation is not only giving Miami homeowners the confidence to sell their homes, but it's allowing some to use the sale of their home to buy a larger property in the area."
Despite the increased prices, Miami properties remain at 2004 pricing 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. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped from 3.57 percent in June to 3.44 percent in July.Total Sales Consistent with Historical Transactions
Total existing Miami-Dade County residential sales -- which posted a record year in 2013 and near record years in 2014 and 2015 -- decreased 20.8 percent year-over-year from 2,817 to 2,232.
Miami-Dade County single-family home transactions decreased 16.4 percent in July, from 1,350 to 1,128. While down from the previous year, the July 2016 sales total finished close to the 1,229 homes sold in July 2014, which was a near-record year for Miami single-family home transactions. Existing condominium sales -- which declined 24.7 percent, from 1,467 to 1,104 -- are competing with new construction market, which continues to add inventory.
Single-family home sales are declining because of significant inventory shortage for properties priced below $300,000. Inventory has dropped 34.3 percent year-over-year for single-family homes priced below $300,000, from 1,869 to 1,228.
The lack of available distressed properties is playing a role. Total Miami distressed sales have declined 55.3 percent year-over-year, from 734 transactions in July 2015 to 328 last month. Only 14.7 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 26.1 percent in July 2015. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 3.4 and 11.3 percent, respectively, of total Miami sales in July 2016. Short sale transactions dropped 47.6 percent year-over-year while REOs fell 57.2 percent.
Nationally, distressed sales were 5 percent of sales in July, down from 7 percent a year ago.
Total existing Miami residential properties combined for $913.3 million in total sales volume in July 2016. The total, which is down from $1.13 billion in July 2015, doesn't include new construction condo sales.Transactions in Popular Price Point Rise
Single-family homes priced between $200,000 and $400,000 saw a 2 percent year-over-year increase in July, growing from 601 to 613. The sector represented 54.3 percent of total Miami single-family home sales in July 2016.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 7.8 percent year-over-year to 47 days. The median number of days between the listing date and closing date for single-family properties dropped 4.7 percent to 101 days.
For condos, the median time to contract increased only 1.4 percent year-over-year to 73 days. The median number of days between the listing date and closing date increased 2.5 percent to 122 days.
The median percent of original list price received for single-family homes was 95.7 percent in July 2016, an increase of 0.1 percent. The median percent of original list price received for existing condominiums was 94.0 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 fell 3.2 percent to a seasonally adjusted annual rate of 5.39 million in July from 5.57 million in June.
Statewide, closed sales of existing single-family homes totaled 24,083 last month, down 8 percent from July 2015, according to Florida Realtors. Florida's condominium sales totaled 8,934 last month, down 11.5 percent compared to July 2015.
The national median existing-home price for all housing types in July was $244,100, up 5.3 percent from July 2015 ($231,800). July's price increase marks the 53rd consecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $223,238, up 11.6 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in July was $160,000, up 6.8 percent over the year-ago figure. Statewide median sales prices for single-family homes and condos have risen for 56 consecutive months.Miami's Cash Buyers Represent More than Twice the National Average
Miami cash transactions comprised 42.7 percent of July total closed sales, compared to 48.1 percent last year. Miami cash transactions are nearly 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 57.3 percent of condo closings were made in cash in July compared to 28.3 percent of single-family home sales.Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes increased 8.1 percent in July from 5,816 active listings last year to 6,289 last month. Inventory has dropped 34.3 percent year-over-year for single-family homes priced below $300,000. Condominium inventory increased 19.1 percent to 14,091 from 11,835 listings during the same period in 2015.
Single-family homes have a 5.7-month supply, which indicates a sellers' market. Existing condominiums have an 11.6-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 July increased 18 percent year-over-year, from 17,651 to 20,380. Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes decreased 11 percent from 1,823 in July of last year to 1,623 last month. New listings of condominiums decreased 4.5 percent, from 2,223 to 2,123.
Nationally, total housing inventory at the end of July inched 0.9 percent higher to 2.13 million existing homes available for sale, but is still 5.8 percent lower than a year ago (2.26 million) and has now declined year-over-year for 14 straight months. Unsold inventory is at a 4.7-month supply at the current sales pace, which is up from 4.5 months in June.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.
Developers are also being cautious not to overbuild. About 85 percent of condos under construction in downtown Miami are sold, according to Integra Realty Resources and the Miami Downtown Development Authority. Downtown Miami has about 7,200 units under construction, a smaller number than the 18,500 the area had under construction in 2006.
Miami's population growth and growing economy is increasing demand for new properties. Fifty-four condo towers with 5,319 units have been completed in Miami-Dade County east of I-95 since the start of 2011, according to an August 23 report from preconstruction condo projects website Cranespotters.com and MIAMI.
There are 76 towers with 12,111 units under construction in Miami-Dade County east of I-95. About 56 towers with 7,037 units are planned, but have not begun development. About 70 towers with 9,823 units are proposed in Miami-Dade County east of I-95.