Coronavirus Outbreak Has Further Accelerated Miami Homebuyer Activity Out of New York
Miami Realtors are reporting this week that Miami-Dade County total home sales rose 3.5% year-over-year in Q3, from 7,104 to 7,351. Miami single-family home transactions surged 9.2%, from 3,514 to 3,839. Miami existing condo sales decreased 2.2%, from 3,590 to 3,512.
"A surge of domestic and foreign buyers are purchasing primary homes in Miami's diverse neighborhoods," MIAMI Chairman of the Board Jorge L. Guerra Jr. said. "Consistently low mortgage rates, expanded work-from-home and remote schooling have only fueled already strong demand for Miami real estate."
The COVID-19 situation has accelerated the trend of homebuyers from New York and cold weather and tax-burdened Northeastern states searching and purchasing homes in South Florida.
Before the COVID-19 situation, the Miami-Dade market was exceptionally strong. Miami real estate had record low delinquencies, no subprime mortgage crisis, strong demand/low supply, low interest rates, strong population growth, demand from foreign buyers and tax refugees from tax burdened states, high consumer confidence and a strong job market.
Miami Single-Family Home Luxury Sales Jump 55.3% in 3Q 2020
Miami-Dade County single-family home luxury ($1-million-and-up) transactions surged 55.3% year-over-year to 441 transactions in 3Q 2020. Miami-Dade County condo luxury sales increased 13.2% to 215 transactions in 3Q 2020.
Record-low interest rates; a record-high S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
Median Home Prices Rise in 3Q 2020
Strong demand coupled with limited supply continue to drive price appreciation in Miami-Dade.
Miami single-family home median prices rose 13.5% year-over-year, from $370,000 to $420,000. Median prices have now increased for 35 consecutive quarters, a streak spanning 8.75 years. Miami existing condo median prices rose 7.8% year-over-year, from $245,000 to $264,000.
Miami, where the median price is still comparable to 2007 figures, remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 93 square meters of prime property, according to Knight Frank's 2019 The Wealth Report. Monaco (16 square meters), Hong Kong (22), New York (31), Los Angeles (36) and others offer significantly less prime land for $1 million.
Dollar Volume Jumps in 3Q 2020
Miami single-family home dollar volume rose 39.6%, from $2 billion to $2.8 billion. Miami condo dollar volume increased 10.5% to $1.5 billion. The sales do not include Miami's multi-billion-dollar new construction condo market.
Non-distressed sales comprised about 96.7% of all closed residential sales in 3Q 2020 vs. 94.3% in 3Q 2019. Only 3.3% of all closed residential sales in Miami were distressed in 3Q 2020, including REO (bank-owned properties) and short sales, compared to 5.7% in 3Q 2019. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 0.7% and 2.6%, respectively, of total Miami sales in 3Q 2020. Short sale transactions decreased 43.2% year-over-year while REOs fell 38.8%.
Lower mortgage rates made home purchases more affordable in 2020. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.95% for 3Q 2020, significantly lower than the 3.67% average reported during the same quarter a year earlier.
Hot Markets Overview Reveals Strong Demand and Limited Supply in Many Local Areas
Months' supply of inventory is a strong indicator of real estate activity. Top Miami-Dade County neighborhoods with the lowest months of supply of inventory (at least 100 new pending sales) in 3Q 2020:
Princeton, a community in south Miami-Dade south of Cutler Bay, had 0.9 months supply.
Homestead, a south Miami-Dade city, had 1.3 months supply.
Cutler Bay, a town in south Miami-Dade County, had 1.4 months supply.
Richmond West, a South-Dade community west of Palmetto Bay, had 1.5 months supply
The Hammocks, a community in south Miami-Dade east of The Crossings, had 1.5 months supply.
Kendale Lakes, a south Miami-Dade community west of South Miami, had 1.4 months supply.
The Hammocks, a community in south Miami-Dade east of The Crossings, had 1.8 months supply
Country Club, a north Miami-Dade community west of Miami Gardens, had 1.9 months supply
Homestead, a south Miami-Dade city, had 2.8 months supply
Fontainebleau, a community in south Miami-Dade County north of Westchester, had 3.8 months supply
Seller's Market for Single-Family Homes, Buyer's Market for Condos
At the current sales pace, the number of active listings represents 3.8 months of inventory for single-family homes and 13.8 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.
Miami real estate had 18,187 active listings in 3Q 2020, a 15.7% decrease from the 21,586 listings at the same time last year. The inventory for single-family homes decreased 37.3%, from 6,444 to 4,039. Miami existing condo inventory decreased 6.6%, from 15,142 to 14,148
Miami Homes Selling Close to List Price
The median percent of original list price received was 96.2% for single-family homes and 94.3% for condos in 3Q 2020.
The median time to contract for single-family home listings was 46 days, an 11.5% decrease from 52 days in 3Q 2019. The median time to contract for existing condos was 72 days, a 6.5% decrease from 77 days in 3Q 2019.
The median time to sale for single-family homes decreased 6%, from 100 days to 94. The median time to sale for existing condos decreased 1.7%, from 118 to 116.
Miami Cash Sales Higher than National Figure
Cash sales represented 27.3% of Miami closed sales in 3Q 2020, compared to 31.9% in 3Q 2019. About 20 percent of U.S. home properties are made in cash, according to the latest NAR statistics.
The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash.
Cash sales accounted for 39.6% of all Miami existing condo sales and 15.9% of single-family transactions.