Based on new data from the Miami Association of Realtors, Miami total home sales decreased 35.5% year-over-year in April 2023, from a historic 3,445 transactions in April 2022 to 2,222 in April 2023, because of rising mortgage rates, the recent banking crisis and lack of supply in certain price points.
Miami single-family home sales decreased 19.7% year-over-year, from 1,246 in April 2022 to 1,000 in April 2023 because of its comparison to a historic month and the current market has lower inventory in specific price points and higher rates.
Miami existing condo sales decreased 44.4% year-over-year, from a historic 2,199 in April 2022 to 1,222 in April 2023, due to rising mortgage rates.
Most of the homes purchased in April 2023 came to terms in March when mortgage rates started at 6.71% before hitting 7.03% on March 7, 2023. Rates leveled off before recently rising again. Rates on March 1, 2022 were 3.90%.
Home sales are sensitive to mortgage rate changes. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.35% as of May 11. That's down from 6.39% the previous week but up from 5.30% one year ago.
"Rising mortgage rates and the banking distress in March tripped up April's home sales," Miami Realtors Chief Economist Gay Cororaton said. "But with inflation on the wane, I expect mortgage rates move towards 5.5% by year-end which will revive the housing rally we saw in the first quarter."
Miami Home Prices
Miami-Dade County single-family home median prices increased 6.2% year-over-year in April 2023, increasing from $565,000 to $600,000. Miami single-family median prices have risen for 137 consecutive months (11.4 years), the longest running-streak on record. Existing condo median prices increased 6.4% year-over-year, from $390,000 to $414,900. Condo median prices have increased in 137 of the last 143 months.
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Inventory for Miami single-family homes (3.3 months) and condos (4.9 months) are low. Also, one of the supports for home prices is rents and rents are up.
Miami-Dade Inventory, New Listings Near All-Time Lows
April 2023 inventory ranks as the second lowest in Miami-Dade history for the month of April, only surpassing April 2022 (7,088). Miami-Dade total inventory is down 53.1% from the historical county average for April. Miami-Dade average inventory for the month of April is 20,081; in April 2023 total inventory was 9,414.
April 2023 new listings rank as the second lowest in Miami-Dade history for the month of April, only surpassing the pandemic month of April 2020 (2,369). Miami-Dade new listings are down 28.8% from the historical county average for April. Miami-Dade average inventory for the month of April is 4,043; in April 2022 new listings totaled 2,879.
Total active listings at the end of April increased 32.5% year-over-year, from 7,077 to 9,378.
Inventory of single-family homes increased 28.3% year-over-year in April 2023 from 2,366 active listings last year to 3,036 last month. Condominium inventory increased 34.6% year-over-year to 6,342 from 4,711 listings during the same period in 2022.
New listings of Miami single-family homes decreased 30.1% to 1,151 from 1,647 year-over-year. New listings of condominiums decreased 25.3%, from 2,287 to 1,709 year-over-year.
Months' supply of inventory for single-family homes increased 73.7% to 3.3 months year-over-year, which indicates a seller's market. Inventory for existing condominiums increased 113% to 4.9 months, which also indicates a seller's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Miami Distressed Sales Remain Low
Only 1.3% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, even with the figure in April 2022. In 2009, distressed sales comprised 70% of Miami sales.
Short sales and REOs accounted for 0.3% and 0.9% year-over-year, respectively, of total Miami sales in April2023.
Miami's percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented 1% of sales in April, unchanged from last month and the prior year.
Miami Cash Sales
Cash sales represented 37.9% of Miami closed sales in April 2023, compared to 43.8% in April 2022. About 28% of U.S. home sales are made in cash, according to the latest NAR statistics.
Cash buyers are not deterred by rising rates. The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash as well as some moving from more expensive U.S. markets who can buy more with their profits from real estate sales.
Cash sales accounted for 50.5% of all Miami existing condo sales and 22.7% of single-family transactions.