Miami Enjoys One Billion of Residential Sales in March
Cash still king in Miami as home price increases continue in 2016
According to a new report by the Miami Association of Realtors, Miami-Dade County residential properties registered nearly $1 billion in sales in March as existing single-family homes posted robust price gains.
The median sales price for single-family existing homes rose 7.7 percent year-over-year in March 2016, from $260,000 to $280,000. The median sales price for existing condominiums decreased 2.6 percent to $209,500 from $215,000. Miami-Dade County existing condo prices have risen in 56 of the last 58 months. Miami prices remain at 2004 levels despite four years of increases.
"After five years of record sales activity, the Miami real estate market continues to post strong sales in key price points," said Mark Sadek, the 2016 M.A.R. Chairman of the Board. "Existing single-family homes and condominiums in the mid-price ranges registered double-digit sale increases in March. Almost 50 percent of all Miami transactions continue to be all-cash, a sign home buyers are committed and invested in the market."Total Sales Finish in Line with Miami 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 8.9 percent year-over-year from 2,706 to 2,465 last month.
Miami-Dade County single-family home transactions decreased 5.8 percent in March, from 1,240 to 1,168. Existing condominium sales -- which declined 11.5 percent, from 1,466 to 1,297 -- are competing with a robust new construction market, which continues to add inventory.
An 8.5 percent drop in distressed sales also contributed to the lower sales activity. Only 19.5 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 28.0 percent in March 2015. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 3.2 and 16.2 percent, respectively, of total Miami sales in March 2016. Short sale transactions dropped 47.0 percent year-over-year while REOs fell 34.1 percent.
Nationally, distressed sales fell to 8 percent in March, down from 10 percent a year ago, according to the National Association of Realtors (NAR).
Total Miami residential properties combined for $996.5 million in total sales volume in March 2016, about 15.1 percent lower than the $1.173 billion sold during the same month last year. The aforementioned sales volume does not include the strong new construction condo sales figures.
The single-family market registered an 8.6-percent decrease in total dollar volume in March 2016, posting $537 million in sales compared to $587.8 million last year. Existing condominiums posted $459.5 million in total dollar sales, a 21.6 percent decline from $586 million in March 2015 but does not include new construction condo sales figures.Transactions in Popular Price Points Rise Significantly
Middle-market Miami homes are seeing a spike in the number of sales. Single-family homes priced between $200,000 and $600,000 saw a 9.6 percent year-over-year increase in March, growing from 644 to 706. The sector represented 60.4 percent of total Miami single-family home sales in March 2016.
Existing condos priced between $150,000 and $250,000 saw a 14.0 percent-rise in sales in March, increasing from 363 transactions to 414. This sector represented 31.9 percent of total existing Miami condo home sales in March 2016.
Miami real estate remains a bargain worldwide. A 120-square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average, according to NAR. Prices for the same condo in London ($960,840), Hong Kong ($776,280), and New York ($1.6 million) are at least five times higher.
Historic-low mortgage rates should continue to attract future buyers. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.69 percent in March, the eighth consecutive month below 4 percent.Miami Real Estate Selling Faster and Close to List Price
The median number of days between the listing and contract dates for Miami single-family home sales fell 18.4 percent year-over-year to 62 days. The median number of days between the listing date and closing date for single-family properties dropped 12.2 percent to 115 days.
For condos, the median time to contract decreased 12.8 percent year-over-year to 68 days. The median number of days between the listing date and closing date decreased 4.9 percent to 117 days.
Miami real estate is selling close to listing price. The median percent of original list price received for single-family homes was 95.1 percent in March 2016, an increase of 0.3 percent. The median percent of original list price received for existing condominiums was 93.8 percent, the same as last year.New Policy Should Qualify More South Florida Condo Buildings for FHA Loans
In addition to competing sales from new construction units, the lack of access to mortgage loans is also impacting existing condominiums. Of the 8,523 condominium buildings in Miami-Dade and Broward Counties, only 23 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.
A new FHA policy should qualify more South Florida condo buildings. On Nov. 12, the FHA announced plans to streamline the condominium recertification process, expand its definition of acceptable owner-occupied units to include second homes not owned by investors and change the way it views co-insurance clauses. The government affairs team of the Miami Association of Realtors advocated for the changes and continues to monitor and support increased condominium recertification.National and State Statistics
Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops jumped 5.1 percent to a seasonally adjusted annual rate of 5.33 million in March from a downwardly revised 5.07 million in February 2016, according to NAR.
Statewide, closed sales of existing single-family homes totaled 23,758, remaining relatively the same (down 0.6 percent) from March 2015, according to Florida Realtors. Florida's condominium sales totaled 10,076 last month, down 7.1 percent compared to March 2015.
The national median existing-home price for all housing types in March 2016 was $222,700, up 5.7 percent from March 2015 ($210,700). March's price increase marks the 49th consecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $209,500, up 10.3 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in March was $155,000, up 3.3 percent over the year-ago figure.Miami's Cash Buyers Still Represent About Twice the National Average
Miami cash transactions comprised 48.6 percent of March total closed sales, compared to 54.0 percent last year. Miami cash transactions remain about double the national average of 25 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 64.1 percent of condo closings were made in cash in March compared to 31.4 percent of single-family home sales.Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes increased 8.2 percent in March from 6,494 active listings last year to 6,004 last month. Condominium inventory increased 15.9 percent to 13,952 from 12,042 listings during the same period in 2015.
There is a 5.7-month supply of Miami single-family homes, an increase of 9.6 percent from March 2015, which indicates a sellers' market. There is a 10.8-month supply of condominium inventory, a year-over-year increase of 21.3 percent, 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 March increased 13.3 percent year-over-year, from 18,046 to 20,446. Active listings remain about 60 percent below 2008 levels when sales bottomed.
New listings of Miami single-family homes increased 6.5 percent from 1,823 in March of last year to 1,942 last month. New listings of condominiums decreased 1.6 percent to 2,683 last month, compared to 2,726 during the same time period in 2015.
Nationally, total housing inventory at the end of March increased 5.9 percent to 1.98 million existing homes available for sale, but is still 1.5 percent lower than a year ago (2.01 million). Unsold inventory is at a 4.5-month supply at the current sales pace, up from 4.4 months in February.New Construction Market
Miami's preconstruction condo market is in a better position today compared to the previous boom. Today, 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 all-cash deposits are a strong sign home buyers are committed to the Miami 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 considerably smaller number than the 18,500 the area had under construction in 2006.
Strong sales in the Miami preconstruction condominium market east of Interstate 95 continue to reflect significant demand for new properties, according to a March 21 report from preconstruction condo projects website Cranespotters.com and M.A.R.
Forty towers with 719 floors and 3,770 units have been completed in Miami-Dade County east of I-95 in the five years since 2011. There are 79 towers with 1,829 floors and 11,726 units under construction in Miami east of I-95. About 53 towers with 1,252 floors and 7,331 units are planned, but have not begun development.