Luxury property sales surge in greater Miami in February
The Miami Association of Realtors is reporting this week Miami-Dade County total home sales posted a double-digit increase for the sixth consecutive month in February 2021 as pent-up demand and record-low mortgage rates continue fueling transactions.
Miami-Dade County total home sales jumped 33.5% year-over-year in February 2021, from 1,862 to 2,485. Miami single-family home sales rose 23.6% year-over-year, from 884 to 1,093. Miami existing condo transactions increased 42.3% year-over-year, from 978 to 1,392.
"Purchases from home buyers in tax-burdened states-- which began with the 2016 tax reform bill and has accelerated since COVID made remote working commonplace-- continue to fuel Miami real estate," MIAMI Chairman of the Board Jennifer Wollmann said. "Low-mortgage rates, increased interest from international buyers and pent-up demand for South Florida real estate are also key factors in rising home sales."
The demand for South Florida real estate is evident in median time to contact. Miami single-family homes are going under contact in 30 days, 53.8% faster than a year ago (65 days). Miami condos are going under contract 60 days, 29.4% faster than a year ago (85 days).
Lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply.
Miami Luxury Single-Family Home Sales Surge 203% in February 2021
Miami single-family luxury ($1-million-and-up) transactions jumped 203% year-over-year to 200 sales in February 2021. Miami existing condo luxury ($1-million-and-up) sales increased 213.5% year-over-year to 163 transactions.
Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
Miami single-family homes priced between $400K to $600K surged 40.5% year-over-year to 312 transactions in February 2021. Miami existing condo sales priced between $400K to $600K increased 83.9% to 171 transactions.
Record-low interest rates; a robust S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
111 Consecutive Months of Price Appreciation in Miami
Strong demand coupled with limited supply continue to drive price appreciation in Miami-Dade.
Miami-Dade County single-family home prices increased 21.6% year-over-year in February 2021, increasing from $370,000 to $450,000. Miami single-family home prices have risen for 111 consecutive months, a streak of more than 9 years. Existing condo prices increased 17.6% year-over-year, from $255,000 to $300,000. Condo prices have increased or stayed even in 113 of the last 117 months.
Miami, where the median price is still comparable to 2007 figures, remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 85 square meters of prime property, according to Knight Frank's 2021 The Wealth Report. Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35) and others offer significantly less prime land for $1 million.
Single-Family Home and Condo Dollar Volume Increases
Single-family home dollar volume increased 124% year-over-year, from $455.4 million to $1 billion. Condo dollar volume increased 130.7% year-over-year, from $372.4 million to $859.3 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.81 in February, up from 2.74% in January. The average commitment rate across all of 2020 was 3.11%.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. 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 the Florida Department of Business and Professional Regulation and FHA.
A better condo approval process is expected to increase sales. The guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR have championed, are expected to generate increased homeownership opportunities.
Miami Distressed Sales Stay Low, Reflecting Healthy Market
Only 1.6% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 6.2% in February 2020. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 66.1%, from 115 to 39.
Short sales and REOs accounted for 0.4% and 1.1% year-over-year, respectively, of total Miami sales in February 2021. Short sale transactions decreased 54.2% year-over-year while REOs decreased 69.2%.
Nationally, distressed sales represented less than 1% of sales in February 2021, down from 2% in February 2020.
Miami Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 97.2% in February 2021, up 1.9% from 95.4% last year. The median percent of original list price received for existing condominiums was 94.3%, up 0.3% from 94% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 30 days, a 53.8% decrease from 65 days last year. The median number of days between the listing date and closing date for condos was 60 days, down 29.4% from 85 days.
The median time to sale for single-family homes was 79 days, a 24.8% decrease from 105 days last year. The median number of days to sale for condos was 104 days, a 18.1% decrease from 127 days.
National and State Statistics
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 6.6% from January to a seasonally-adjusted annual rate of 6.22 million in February. Sales in total climbed year-over-year, up 9.1% from a year ago (5.70 million in February 2020).
In February, statewide home sales totaled 23,947, up 15.7% year-over-year, while existing condo-townhouse sales totaled 11,379, up 28.7% over February 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, the median existing-home price for all housing types in February was $313,000, up 15.8% from February 2020 ($270,400), as prices rose in every region. February's national price jump marks 108 straight months of year-over-year gains.
The statewide median sales price for single-family existing homes was $314,900, up 16.6% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month's statewide median price for condo-townhouse units was $233,240, up 16.6% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Miami's Cash Buyers Top National Figure
Miami cash transactions comprised 35.8% of February 2021 total closed sales, compared to 37.3% last year. The national figure for cash buyers is 22%.
Miami's high percentage of cash sales reflects South Florida's ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami's cash purchases as 47.8% of condo closings were made in cash in February 2021 compared to 20.5% of single-family home sales.
Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes decreased 49.9% in February 2021 from 6,238 active listings last year to 3,128 last month. Condominium inventory decreased 21.6% to 14,960 from 11,735 listings during the same period in 2020.
Inventory of active listings has decreased the last 18 months for single-family homes.
Months supply of inventory for single-family homes decreased 49.1% to 2.8 months, which indicates a seller's market. Inventory for existing condominiums decreased 19% to 10.2 months, which indicates a buyer's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Months supply of inventory is down since July 2019 for single-family, reflecting strong demand.
Total active listings at the end of February 2021 decreased 29.9% year-over-year, from 21,198 to 14,863. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Miami single-family homes decreased 4.8% to 1,594 from 1,674. New listings of condominiums increased 8.2%, from 2,268 to 2,454.