Miami Cash Buyers Near Double the National Home Buying Average
According to the Miami Association of Realtors, Miami mid-market home sales and median prices for all properties increased in February 2019, reflecting demand for local properties, particularly in certain price points.
Sales for single-family homes priced between $300K and $600K increased 15.4 percent year-over-year in February, from 357 to 412. Sales for existing condominiums priced between $300K and $600K increased 15.9 percent, from 194 to 225. Mid-market growth is an indicator of stability. Median prices rose 3.8 percent for single-family homes to $345,000. Condo median prices increased 8.7 percent to $250,000.
Total Home Sales Decrease in February Due in Part to Higher Interest Rates
Uncertainty over mortgage interest rates and the stock market may have impacted Miami-Dade total home sales in February. Total Miami-Dade County sales decreased 3.6 percent year-over-year in February 2019, from 1,804 to 1,739. Lack of inventory in lower price points also contributed to the decline in transactions.
"Miami real estate continues to see high demand not only from international buyers, but from consumers around the United States," MIAMI Chairman of the Board José María Serrano said. "South Florida is seeing more domestic home buyers than ever before. The new federal tax law, which put a $10,000 cap on state and local tax deductions, is one reason why people are fleeing high-tax states to buy in Florida."
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.37 percent in February from 4.46 percent in January. Despite the monthly decline in average commitment rate, many closings in February were impacted by the higher rates because of when the rates were locked in and how long it takes to close. The median number of days between the listing date and closing date for single-family homes was 108 days; 122 for condos.
Miami single-family home sales decreased 1.8 percent, from 820 to 805. Condo sales decreased 5.1 percent, from 984 to 934. Condo sales have increased in seven of the last 11 months.
Total sales volume decreased 0.1 percent to $863.2 million in February 2019. Single-family home dollar volume increased 3.1 percent from $436.1 million to $4449.7 million. Condo dollar volume decreased 3.4 percent from $428 million to $413.5 million.
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.
7.25 Consecutive Years of Price Appreciation in Miami
Miami-Dade County single-family home prices increased 3.8 percent in February 2019, increasing from $332,500 to $345,000. Miami single-family home prices have risen for 87 consecutive months, a streak of 7.25 years. Existing condo prices increased 8.7 percent, from $230,000 to $250,000. Condo prices have increased or stayed even in 90 of the last 93 months.
Miami Distressed Sales Continue to Drop, Reflecting Healthy Market
Only 7.4 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 7.6 percent in February 2018. In 2009, distressed sales comprised 70 percent of Miami sales.
Total Miami distressed sales decreased 6.6 percent year-over-year, from 137 to 128.
Short sales and REOs accounted for 0.9 and 6.4 percent, respectively, of total Miami sales in February 2019. Short sale transactions decreased 46.7 percent year-over-year while REOs increased 4.7 percent.
Nationally, distressed sales accounted for 4 percent of sales, equal to the percentage a year ago, according to NAR.
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 61 days, a 32.6 percent increase from 46 days last year. The median number of days between the listing date and closing date for single-family homes was 108 days, a 14.9 percent increase from 94 days.
The median time to contract for condos was 83 days, the same as last year. The median number of days between listing date and closing date decreased 0.8 percent to 122 days.
The median percent of original list price received for single-family homes was 95 percent. The median percent of original list price received for existing condominiums was 92.6 percent.
National and State Statistics
Nationally, total existing-home sales shot up 11.8 percent from January to a seasonally adjusted annual rate of 5.51 million in February. However, sales are down 1.8 percent from a year ago (5.61 million in February 2018).
Statewide closed sales of existing single-family homes totaled 18,966 last month, up 1.9 percent compared to February 2018, according to Florida Realtors. Looking at Florida's condo-townhouse market in February, statewide closed sales totaled 7,981, down 5.7 percent compared to a year ago.
The national median existing-home price for all housing types in February was $249,500, up 3.6 percent from February 2018 ($240,800). February's price increase marks the 84th straight month of year-over-year gains.
In February, statewide median sales prices for both single-family homes and condo-townhouse properties increased year-over-year for the 86th consecutive month. The statewide median sales price for single-family existing homes was $250,000, up 1.3 percent 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 $187,500, up 4.7 percent over the year-ago figure.
Miami's Cash Buyers Represent Almost Double the National Figure
Miami cash transactions comprised 39.9 percent of February 2019 total closed sales, compared to 42.7 percent last year. Miami cash transactions are almost double the national figure (23 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 54.7 percent of condo closings were made in cash in February compared to 22.7 percent of single-family home sales.
Balanced Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes increased 14.2 percent in February from 6,348 active listings last year to 7,250 last month. Condominium inventory increased 4.2 percent to 16,583 from 15,922 listings during the same period in 2017.
The increase in inventory is for properties above $300,000 for condos and for properties above $600,000 for single family homes.
Months supply of inventory for single-family homes increased 13.3 percent to 6.8 months, which indicates a balanced market. Existing condominiums have a 14.5-month supply, which indicates a buyer's market. A balanced market between buyers and sellers offers between six and nine months supply.
Total active listings at the end of February increased 7.0 percent year-over-year, from 22,270 to 23,833. Active listings remain about 60 percent below 2008 levels when sales bottomed.
New listings of Miami single-family homes increased 0.2 percent to 1,781 from 1,778. New listings of condominiums 7.1 percent, from 2,594 to 2,409.
Nationally, total housing inventory at the end of February increased to 1.63 million, up from 1.59 million existing homes available for sale in January, a 3.2 percent increase from 1.58 million a year ago. Unsold inventory is at a 3.5-month supply at the current sales pace, down from 3.9 months in January but up from 3.4 months in February 2018.