According to the Miami Association of Realtors, Miami existing condominium and total luxury home sales increased in February 2018.
Miami-Dade County existing condominium sales--which are competing with one of the most robust new construction markets in the country -- rose for the fourth consecutive month in February. Miami luxury $1-million-and-up sales jumped 31 percent, from 116 in February 2017 to 152 in February 2018.
"Miami $1-million-and-up home sales have surged in four of the last five months, a sign of the robust pent-up demand for Miami luxury properties," said George Jalil, a Miami broker and the 2018 MIAMI chairman of the board. "In regards to Miami existing condos, a spike in condo transactions in the $200,000 to $300,000 range fueled another strong month for the sector."
Federal tax reform, which was signed into law Dec. 22, sets a deductions cap for income, sales and property taxes at $10,000. The new cap is leading more residents of states with high property values and state income tax to purchase properties in states such as Florida, which has no state income tax and a pro-business tax structure.
Condo Sales Rise for Fourth Consecutive Month
Miami existing condo sales increased for the fourth consecutive month, rising 3 percent to 983 from 954. The increase was fueled in a surge in entry-level home sales. Existing condo home sales in the $200,000 to $300,000 price range jumped 21.4 percent, from 220 in February 2017 to 267 in February 2018.
Single-family home sales decreased 6.9 percent, from 881 to 820. Lack of single-family home supply in mid-price ranges is negatively impacting sales despite strong demand.
Total existing Miami-Dade County residential sales decreased 1.7 percent year-over-year from 1,835 to 1,803.
Total sales volume for all properties accounted for $864 million last month, up 3.6 percent from $834.1 million a year ago. Sales don't include Miami's multi-billion dollar new construction condo market.
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 12 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
Miami Luxury Sales Surge in February
Total Miami luxury $1-million-and-up sales jumped 31 percent, from 116 in February 2017 to 152 in February 2018.
Miami condo luxury sales jumped 30.9 percent, from 55 to 72, in February 2018. Miami condo luxury sales have risen in four out of the last five months (Feb. 2018, Jan. 2018, Dec. 2017 and Oct. 2017).
Miami single-family luxury home sales rose 31.1 percent, from 61 to 80. Miami single-family luxury sales have risen in four out of the last five months (Feb. 2018, Jan. 2018, Dec. 2017 and Oct. 2017).
More than Six Consecutive Years of Price Appreciation in Miami
Miami-Dade County single-family home prices increased 3.6 percent in February 2018, increasing from $321,000 to $332,500. Miami single-family home prices have risen for 75 consecutive months, a streak spanning more than six years. Existing condo prices rose 4.5 percent, from $220,000 to $230,000 in February. Condo prices have increased in 78 of the last 81 months.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage moved higher for the fifth straight month to 4.33 percent in February (highest since 4.34 percent in April 2014) from 4.03 percent in January. The average commitment rate for all of 2017 was 3.99 percent.
Miami Distressed Sales Continue to Drop
Only 7.6 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 13.3 percent in February 2017. In 2009, distressed sales comprised 70 percent of Miami sales.
Total Miami distressed sales declined 43.9 percent year-over-year, from 244 to 137 last month.
Short sales and REOs accounted for 1.7 and 5.9 percent, respectively, of total Miami sales in February 2018. Short sale transactions dropped 41.2 percent year-over-year while REOs fell 44.6 percent.
Nationally, distressed sales accounted for 4 percent of sales, down from 7 percent a year ago.
Miami Real Estate Selling Close to List Price
The median number of days between listing and contract dates for Miami single-family home sales was 46 days, a 24.6 percent decrease from 61 days last year. The median number of days between the listing date and closing date for single-family properties was 94 days, a 16.1 percent decrease from 112 days.
The median time to contract for condos stayed even year over year at 83 days. The median number of days between listing date and closing date decreased 3.1 percent to 123 days.
The median percent of original list price received for single-family homes was 95.4 percent. The median percent of original list price received for existing condominiums was 93.8 percent.
National and State Statistics
Nationally, total existing-home sales grew 3.0 percent to a seasonally adjusted annual rate of 5.54 million in February from 5.38 million in January. After last month's increase, sales are now 1.1 percent above a year ago.
Statewide closed sales of existing single-family homes totaled 18,620 last month, up 3.3 percent compared to February 2017, according to Florida Realtors. Statewide closed condo sales totaled 8,457 last month, up 6.4 percent compared to February 2017.
The national median existing-home price for all housing types in February was $241,700, up 5.9 percent from February 2017 ($228,200). February's price increase marks the 72ndstraight month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $246,500, up 9.6 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in February was $179,500, up 7.2 percent over the year-ago figure.
Miami's Cash Buyers Represent almost Double the National Figure
Miami cash transactions comprised 42.8 percent of February 2018 total closed sales, compared to 47.4 percent last year. Miami cash transactions are almost double the national figure (24 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. Miami has a higher percent of cash sales for condos due to lack of financing approvals for buildings.
Condominiums comprise a large portion of Miami's cash purchases as 54.2 percent of condo closings were made in cash in January compared to 29.0 percent of single-family home sales.
Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes decreased 2.3 percent in February from 6,489 active listings last year to 6,342 last month. Condominium inventory increased 4.0 percent to 15,902 from 15,289 listings during the same period in 2017.
Monthly supply of inventory for single-family homes increased 1.7 percent to 6.0 months, which indicates a seller's market. Existing condominiums have a 14.4-month supply, which indicates a buyer's market. A balanced market between buyers and sellers offers between six and nine months supply of inventory.
Total active listings at the end of February increased 2.1 percent year-over-year, from 21,778 to 22.244. Active listings remain about 60 percent below 2008 levels when sales bottomed.
New listings of Miami single-family homes increased 11.3 percent to 2,814 from 2,950. New listings of condominiums increased 7.3 percent, from 2,414 to 2,590.
Nationally, total housing inventory at the end of February rose 4.6 percent to 1.59 million existing homes available for sale, but is still 8.1 percent lower than a year ago (1.73 million) and has fallen year-over-year for 33 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace (3.8 months a year ago).