It's a Seller's Market in Miami for Homes, Buyer's Market for Condos
According to the Miami Association of Realtors, Miami single-family home prices have risen for more than five consecutive years and existing condo prices have appreciated in 65 of the last 67 months.
Miami-Dade County single-family home prices jumped 9.5 percent in December 2016, increasing from $278,500 to $305,000. Existing condos increased 1.3 percent, from $207,400 to $210,000. Miami single-family home prices have now risen for 61 consecutive months. Condo prices have increased in 65 of the last 67 months, a streak spanning more than five years.
"Low supply and high demand for Miami single-family homes have fueled five-plus years of residential price growth," said Christopher Zoller, the 2017 Miami Association of Realtors chairman of the board. "In addition to rising prices, Miami also saw more mid-market single-family home transactions and more traditional or non-distressed home sales in December."
Despite the rise in prices, Miami real estate remains a major bargain compared to other global cities. A condominium in the Miami-Fort Lauderdale-Miami Beach metropolitan area typically cost $170,000 in 2016 Q3, according to the National Association of Realtors. 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.
Rising mortgage rates are another factor impacting local sales. More homebuyers are coming off the sidelines to take advantage of current mortgage rates, which despite their increases are still at historic lows.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage is 4.20 percent. December's average commitment rate was the highest rate since April 2014 (4.32 percent). The average rate in 1990, in comparison, was 10.13 percent.Single-Family Home Sales Effectively Even
Total existing Miami-Dade County residential sales -- which posted a record year in 2013 and near record years in 2014 and 2015 -- decreased 4.3 percent year-over-year from 2,254 to 2,156.
Single-family home sales stayed effectively even, decreasing 0.6 percent year-over-year from 1,078 in December 2015 to 1,072 last month. Existing condo sales -- which are competing with a robust new construction market -- decreased 7.8 percent year-over-year, from 1,176 transactions to 1,084.
Sales for mid-market Miami single-family homes, or properties listed from $300,000 to $600,000, increased 26.6 percent in December, from 323 to 409. Homes sold in the $300K to $600K range represent 38.2 percent of total Miami single-family home sales.
Miami single-family traditional sales also posted gains, jumping 14.4 percent from last year. This gain in traditional sales, from 797 to 912 transactions, is great news for the local market.
Total sales volume for all properties accounted for $797.9 million last month, a 16.4 percent decrease from the $954 million sales volume a year ago. These sales do not include Miami's multi-billion dollar new construction condo market.Miami Distressed Sales Continue to Decline
Total Miami distressed sales declined 41.4 percent year-over-year, from 515 to 302 last month. Only 14.0 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 22.8 percent in December 2015. In 2009, distressed sales comprised 70 percent of Miami sales.
Short sales and REOs accounted for 3.0 and 11.0 percent, respectively, of total Miami sales in December 2016. Short sale transactions dropped 38.7 percent year-over-year while REOs fell 42.1 percent.
Nationally, distressed sales accounted for 7 percent of all sales in December, down from 8 percent a year ago.Miami Real Estate Selling Fast and Close to List Price
The median number of days between listing and contract dates for Miami single-family home sales was 50 days, a 5.7 percent decrease from 53 days last year. The median number of days between the listing date and closing date for single-family properties decreased 1.9 percent to 106 days.
For condos, the median time to contract increased 1.4 percent to 75 days. The median number of days between the listing date and closing date increased 4.2 percent to 123 days.
The median percent of original list price received for single-family homes increased 0.7 percent to 95.7 percent. The median percent of original list price received for existing condominiums stayed the same at 94.1 percent.Lack of Condo Financing Continues to Impact Sales
In addition to competing sales from new construction units, the lack of access to mortgage loans continues to impact existing condominiums. 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 statistics from the Florida Department of Business and Professional Regulation and FHA.National and State Statistics
Nationally, total existing-home sales decreased 2.8 percent to a seasonally adjusted annual rate of 5.49 million in December from an upwardly revised 5.65 million in November, according to NAR.
Statewide, closed sales of existing single-family homes totaled 22,332 last month, up 0.8 percent from December 2015, according to Florida Realtors.
The national median existing-home price for all housing types in December was $232,200, up 4.0 percent from December 2015 ($223,200). December's price increase marks the 58th consecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $226,000, up 9.2 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in December was $166,900, up 7.7 percent over the year-ago figure.Miami's Cash Buyers Represent More than Double the National Average
Miami cash transactions comprised 42.4 percent of December total closed sales, compared to 50.1 percent last year. Miami cash transactions are more than double the national average of 21 percent. 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 57.6 percent of condo closings were made in cash in November compared to 27.1 percent of single-family home sales.Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes increased 5.2 percent in December from 5,909 active listings last year to 6,218 last month. Condominium inventory increased 16.3 percent to 14,436 from 12,408 listings during the same period in 2015.
Single-family homes have a 5.7-month supply, which indicates a seller's market. Existing condominiums have a 12.7-month supply, which indicates a buyers' market. A balanced market between buyers and sellers offers between six and nine months supply of inventory.
Total active listings at the end of December increased 12.8 percent year-over-year, from 18,317 to 20,654. Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes decreased 8.9 percent, from 1,293 to 1,178. New listings of condominiums decreased 7.9 percent, from 2,015 to 1,856.
Nationally, total housing inventory at the end of December dropped 10.8 percent to 1.65 million existing homes available for sale, which is the lowest level since NAR began tracking the supply of all housing types in 1999. Inventory is 6.3 percent lower than a year ago (1.76 million), has fallen year-over-year for 19 straight months and is at a 3.6-month supply at the current sales pace.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 required during the last real estate cycle. The large cash deposits show how committed Miami's preconstruction condo buyers are to the local market.
Sixty-four condo towers with 6,760 units have been completed in Miami-Dade County east of I-95 in the last five years since the start of 2011, according to a Jan. 23 report from preconstruction condo projects website Cranespotters.com and the Miami Association of Realtors.