Hurt by Government Shutdown, Stock Market Dips and Rising Rates
According to the Miami Association of Realtors, uncertainty over mortgage interest rates, the federal government shutdown and the stock market may have impacted Miami-Dade total home sales in January 2019.
After posting single-family home sales increases in five of the last six months and the fourth biggest single-family homes sales year in history in 2018, total Miami-Dade County sales decreased 11.7 percent year-over-year in January 2019, from 1,820 to 1,607. Lack of inventory in lower price points also contributed to the decline in transactions.
"Mid-market sales in the $300,000 to $400,000 range increased for single-family homes in January," said 2019 MIAMI Chairman of the Board José María Serrano. "Total sales year-over-year decreased in January due to the recent uptick in interest rates."
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.46 percent in January from 4.64 percent in December. The average commitment rate for all of 2018 was 4.54 percent.
Miami single-family home sales decreased 11.5 percent, from 875 to 774. Condo sales decreased 11.9 percent, from 945 to 833. Condo sales have increased in seven of the last 10 months. The decrease in January 2019 is due to a lack of inventory in lower price points. Inventory decreases for Miami single-family homes selling at $400,000 and below.
Total sales volume decreased 3.94 percent to $760.1 million in January 2019. Single-family home dollar volume decreased 0.3 percent from $407.5 million to $406.4 million. Condo dollar volume decreased 7.8 percent from $383.8 million to $353.7 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.
Seven Consecutive Years of Price Appreciation in Miami
Miami-Dade County single-family home prices increased 6.1 percent in January 2019, increasing from $330,000 to $350,000. Miami single-family home prices have risen for 86 consecutive months, a streak of seven plus years. Existing condo prices stayed even year-over-year at $230,000. Condo prices have increased or stayed even in 89 of the last 92 months.
Miami Distressed Sales Continue to Drop, Reflecting Healthy Market
Only 7.9 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 9.9 percent in January 2018. In 2009, distressed sales comprised 70 percent of Miami sales.
Total Miami distressed sales decreased 28.9 percent year-over-year, from 180 to 128.
Short sales and REOs accounted for 1.4 and 6.5 percent, respectively, of total Miami sales in January 2019. Short sale transactions decreased 28.1 percent year-over-year while REOs decreased 29.1 percent.
Nationally, distressed sales accounted for 4 percent of sales, down from 5 percent 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 55 days, a 17 percent increase from 47 days last year. The median number of days between the listing date and closing date for single-family homes was 105 days, a 7.1 percent increase from 98 days.
The median time to contract for condos was 72 days, a 4 percent decrease from 75 days last year. The median number of days between listing date and closing date decreased 6.5 percent to 115 days.
The median percent of original list price received for single-family homes was 95.3 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 1.2 percent from December to a seasonally adjusted annual rate of 4.94 million in January, according to NAR. Sales are now down 8.5 percent from a year ago (5.40 million in January 2018).
Statewide closed sales of existing single-family homes totaled 15,526 last month, down 6.2 percent compared to January 2018, according to Florida Realtors. Looking at Florida's condo-townhouse market in January, statewide closed sales totaled 6,739, down 10.9 percent compared to a year ago.
The national median existing-home price for all housing types in January was $247,500, up 2.8 percent from January 2018 ($240,800). January's price increase marks the 83rd straight month of year-over-year gains.
In January, statewide median sales prices for both single-family homes and condo-townhouse properties increased year-over-year for the 85th month-in-a-row. The statewide median sales price for single-family existing homes was $249,900, up 4.1 percent from the previous year, according to Florida Realtors. Last month's statewide median price for condo-townhouse units was $182,500, up 2.8 percent over the year-ago figure.
Miami's Cash Buyers Represent Almost Double the National Figure
Miami cash transactions comprised 37.7 percent of January 2019 total closed sales, compared to 42.4 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. 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 51.1 percent of condo closings were made in cash in January compared to 23.3 percent of single-family home sales.
Balanced Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes increased 16.1 percent in January from 6,255 active listings last year to 7,265 last month. Condominium inventory increased 6.1 percent to 16,518 from 15,573 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 15.3 percent to 6.8 months, which indicates a balanced 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.
Total active listings at the end of January increased 8.9 percent year-over-year, from 21,828 to 23,783. Active listings remain about 60 percent below 2008 levels when sales bottomed.
New listings of Miami single-family homes increased 4.4 percent to 1,998 from 1,913. New listings of condominiums decreased 3.8 percent, from 2,779 to 2,673.
Nationally, total housing inventory at the end of January increased to 1.59 million, up from 1.53 million existing homes available for sale in December and represents an increase from 1.52 million a year ago. Unsold inventory is at a 3.9-month supply at the current sales pace, up from 3.7 months in December and from 3.4 months in January 2018.