According to the Miami Association of Realtors, Miami's existing condominium sales increased for the second time in three months and $1-million-and-up luxury transactions surged for all properties in July 2017.
Sales for existing Miami luxury condos, which are competing with a robust new construction market, surged 51.1 percent and luxury single-family home sales jumped 9.6 percent. Sales for $1-million-and-up homes have now increased for five consecutive months. Luxury condo sales have risen for two straight months. Miami condominium sales increased 2.5 percent in July, from 1,104 to 1,132.
"Sellers are becoming more realistic with their prices, especially at the top of the market," said Christopher Zoller, the 2017 MIAMI chairman of the board and a Coral Gables Realtor. "The recent run-up of the stock market and the potential for interest rate hikes are also encouraging more buyers to come off the sidelines and purchase Miami real estate."
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.97 percent in July from 3.90 percent in June. The average commitment rate for all of 2016 was 3.65 percent.
Total Home Sales Increase
Total existing Miami-Dade County residential sales -- which posted a record year in 2013 and near record years in 2014 and 2015 -- increased 0.8 percent year-over-year from 2,232 to 2,249.
Sales for existing condominiums increased 2.5 percent year-over-year, from 1,104 to 1,132. Sales for Miami single-family homes decreased 1.0 percent year-over-year, from 1,128 to 1,117.
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.
Condo Luxury Sales Surge 51.1 percent
Luxury existing condo sales increased 51.1 percent year-over-year in July, from 45 to 68. Luxury condo sales have risen for two straight months.
Luxury single-family home sales increased 20.5 percent year-over-year in July, from 73 to 80. Sales for $1-million-and-up homes have now increased for five consecutive months.
Miami single-family mid-market home sales, or transactions for properties listed between $250,000 and $600,000, also rose. Mid-market sales increased 15.5 percent in July, from 574 to 663 sales. Mid-market home sales are the largest segment of all single-family home sales, comprising 59.4 percent.
Miami single-family traditional sales, or non-distressed transactions, rose 4.4 percent. Traditional sales for existing condominiums increased 6.1 percent. This growth in traditional sales shows the health and strength of the Miami market.
Total sales volume for all properties accounted for $961.1 million last month. These sales do not include Miami's multi-billion dollar new construction condo market.
5.5 Years of Price Appreciation in Miami
Miami-Dade County single-family home prices jumped 12 percent in July 2017, increasing from $299,000 to $335,000. Miami single-family home prices have now risen for 68 consecutive months, a streak spanning more than five and half years. Existing condo prices remained the same at $225,000. Condo prices have increased in 71 of the last 74 months.
Miami real estate remains a major bargain. A 120-square meter condominium in Miami-Fort Lauderdale-Miami Beach cost $170,000 in 2016 Q3, according to the National Association of REALTORS® (NAR). The average cost of a 120-square meter apartment in 2016 in the prime inner city areas of London ($4.1 million), Hong Kong ($3.1 million), and New York ($2.2 million) were at least ten times higher, according to Global Property Guide.
Miami Distressed Sales Continue to Drop
Only 10.9 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 14.7 percent in July 2016. Total Miami distressed sales declined 25.3 percent year-over-year, from 328 to 245 last month. In 2009, distressed sales comprised 70 percent of Miami sales.
Short sales and REOs accounted for 2.7 and 8.2 percent, respectively, of total Miami sales in July 2017. Short sale transactions dropped 18.7 percent year-over-year while REOs fell 27.3 percent.
Nationally, distressed sales accounted for 5 percent of sales in July, unchanged from a year ago.
Miami Real Estate Selling Faster and Close to List Price
The median number of days between listing and contract dates for Miami single-family home sales was 41 days, a 12.8 percent decrease from 47 days last year. The median number of days between the listing date and closing date for single-family properties was 92 days, an 8.9 percent decrease from 101 days.
Condos moved faster to contract and took slightly longer to close. The median time to contract for condos decreased 1.4 percent to 72 days. The median number of days between listing date and closing date increased 2.5 percent to 119 days.
The median percent of original list price received for single-family homes was 95.6 percent. The median percent of original list price received for existing condominiums was 93.5 percent.
National and State Statistics
Nationally, total existing-home sales decreased 1.3 percent to a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June. July's sales pace is still 2.1 percent above a year ago.
Statewide closed sales of existing single-family homes totaled 24,546 last month, up 2 percent compared to July 2016, according to Florida Realtors. Statewide closed condo sales totaled 9,246 last month, up 3.6 percent compared to July 2016.
The national median existing-home price for all housing types in July was $258,300, up 6.2 percent from July 2016 ($243,200). July's price increase marks the 65th straight month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $240,000, up 7.1 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties was $170,950, up 6.8 percent over the year-ago figure. July marked the 68th month-in-a-row that statewide median prices for both sectors rose year-over-year.
Miami's Cash Buyers Represent More than Double the National Figure
Miami cash transactions comprised 39.9 percent of July total closed sales, compared to 42.7 percent last year. Miami cash transactions are more than double the national figure (19 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 56.4 percent of condo closings were made in cash in July compared to 23.2 percent of single-family home sales.
Seller's Market for Single-Family Homes, Supply Declines in July
Inventory of single-family homes decreased 1.8 percent in July from 6,300 active listings last year to 6,187 last month. Condominium inventory increased 7.0 percent to 15,077 from 14,092 listings during the same period in 2016.
Monthly supply of inventory for single-family homes decreased 3.5 percent from 5.7 months to 5.5. The 5.5-month supply indicates a seller's market. Existing condominiums have a 13.5-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 July increased 4.3 percent year-over-year, from 20,392 to 21,264. Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes increased 9.2 percent, from 1,623 to 1,772. New listings of condominiums increased 9.5 percent, from 2,126 to 2,328.
Nationally, total housing inventory at the end of July declined 1.0 percent to 1.92 million existing homes available for sale, and is now 9.0 percent lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.
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 or less required during the last real estate cycle. The large cash deposits show how committed Miami's preconstruction condo buyers are to the local market.
Eighty-six condo towers with 8,749 units have been completed in Miami-Dade County east of I-95 in the six years since the beginning of 2011, according to a July 20 report from preconstruction condo projects website Cranespotters.com and MIAMI.