Single Family Home Sales Spike in Late 2016, Condo Sales Dip
According to a new report by the MIAMI Association of Realtors, the Miami single-family homes market registered its best November in seven years as total single-family home sales jumped 13.1 percent, mid-market home sales rose 45.2 percent and luxury sales skyrocketed 43.4 percent year-over-year.
Prices for all Miami properties and total sales volume increased as some home buyers and investors moved to finalize purchases in the wake of the Nov. 8 U.S. presidential election.
"The political uncertainty led some home buyers to pause and take a wait-and-see approach with real estate," said Mark Sadek, a Coral Springs Realtor and the 2016 MIAMI chairman of the board. "Now that the election is over and there's more certainty about the direction of the country, home buying should increase for a South Florida region that's seeing sustained population and job growth."
Mortgage rates have increased in recent weeks, and that may have encouraged some home buyers who were waiting on the sidelines to make purchases in November. Despite the increase, mortgage rates remain at historic lows, making home buying more affordable.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage is 3.77 percent. The average rate in 1990, in comparison, was 10.13 percent.
Single-Family Home Sales Soar
Total existing Miami-Dade County residential sales -- which posted a record year in 2013 and near record years in 2014 and 2015 -- decreased a negligible 0.3 percent year-over-year from 2,003 to 1,997.
Single-family home sales increased 13.1 percent year-over-year, from 906 in November 2015 to 1,025 last month. The 1,025 transactions are the highest November total for the Miami single-family homes market since November 2009 when 1,156 homes were sold.
Existing condo sales -- which are competing with a robust new construction market -- decreased 11.4 percent year-over-year, from 1,097 transactions to 972.
Sales for mid-market Miami single-family homes, or properties listed from $300,000 to $600,000, increased 45.2 percent in November, from 261 to 379. Homes sold in the $300K to $600K range represent 37 percent of total Miami single-family home sales.
The top of the single-family homes market also had a strong month. Luxury ($1-million-and-above) homes posted 43.4 percent more transactions than a year ago, rising from 53 to 76 sales.
Miami single-family traditional sales also posted gains, jumping an impressive 30.5 percent from last year. This huge gain in traditional sales, from 662 to 864 transactions, is great news for the local market.
Total sales volume for all properties accounted for $829.2 million last month, a 9.6 percent increase from the $756.9 million sales volume a year ago. These sales do not include Miami's multi-billion dollar new construction condo market.
Median Sales Prices Rise for All Properties
Median sale prices for single-family homes jumped 13.1 percent, increasing from $274,200 to $310,000. Existing condos experienced 7.0 percent price appreciation, climbing from $203,000 to $217,250. Miami single-family home prices have risen for 60 consecutive months. Condo prices have increased in 64 of the last 66 months, a streak spanning more than five years.
Despite the increased prices, Miami properties remain at 2005 price levels and at a major bargain compared to other global cities. A 120-square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average, according to the National Association of Realtors (NAR). London ($960,840), Hong Kong ($776,280), and New York ($1.6 million) prices are at least five times higher.
Miami Distressed Sales Continue to Decline
Total Miami distressed sales declined 39.7 percent year-over-year, from 491 to 296 last month. Only 14.8 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 24.5 percent in November 2015. In 2009, distressed sales comprised 70 percent of Miami sales.
Short sales and REOs accounted for 3.8 and 11.0 percent, respectively, of total Miami sales in November 2016. Short sale transactions dropped 12.6 percent year-over-year while REOs fell 50 percent.
Nationally, distressed sales accounted for 6 percent of all sales in November, down from 9 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 6.4 percent increase from 47 days last year. The median number of days between the listing date and closing date for single-family properties increased 4.9 percent to 107 days.
For condos, the median time to contract increased 6 percent to 71 days. The median number of days between the listing date and closing date stayed the same at 119 days.
The median percent of original list price received for single-family homes increased 0.1 percent to 95.5 percent. The median percent of original list price received for existing condominiums was 93.5 percent, a decrease of 1.2 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 rose 0.7 percent to a seasonally adjusted annual rate of 5.61 million in November from a downwardly revised 5.57 million in October. November's sales pace is now the highest since February 2007 (5.79 million) and is 15.4 percent higher than a year ago (4.86 million).
Statewide, closed sales of existing single-family homes totaled 19,763, up 12.8 percent from November 2015, while townhouse-condo sales totaled 7,794, up 4.1 percent compared to a year ago.
The national median existing-home price for all housing types in November was $234,900, up 6.8 percent from November 2015 ($220,000). November's price increase marks the 57th consecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $220,000, up 10 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in November was $162,000, up 8 percent over the year-ago figure. Statewide median sales prices for single-family homes and condos have risen for 60 consecutive months.
Miami's Cash Buyers Represent More than Double the National Average
Miami cash transactions comprised 43 percent of November total closed sales, compared to 55 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 home buyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami's cash purchases as 57.4 percent of condo closings were made in cash in November compared to 29.5 percent of single-family home sales.
Balanced Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes increased 7.7 percent in November from 6,131 active listings last year to 6,605 last month. Condominium inventory increased 18.6 percent to 14,811 from 12,492 listings during the same period in 2015.
Single-family homes have a 6.0-month supply, which indicates a balanced market. Existing condominiums have a 13-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 October increased 15 percent year-over-year, from 18,623 to 21,416. Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes increased 5.7, from 1,475 to 1,559. New listings of condominiums increased 1 percent, from 2,196 to 2,217.
Nationally, total housing inventory at the end of November dropped 8.0 percent to 1.85 million existing homes available for sale, and is now 9.3 percent lower than a year ago (2.04 million) and has fallen year-over-year for 18 straight months. Unsold inventory is at a 4.0-month supply at the current sales pace, which is down from 4.3 months in October.
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 Dec. 12 report from preconstruction condo projects website Cranespotters.com and the MIAMI Association of Realtors.