Greater Miami, Key Biscayne Non-Distressed Homes Enjoy Double-Digit Sales Growth
According to the Miami Association of Realtors, non-distressed Miami single-family home sales increased 11.3 percent in June 2016 as median home prices rose for the 55th consecutive month.
"Rising non-distressed home sales are a sign of a healthy market," said Mark Sadek, the 2016 M.A.R. chairman of the board. "Non-distressed Miami single-family home transactions have now increased for six consecutive months. Miami is also seeing strong demand at mid-price points in both existing single-family homes and condos."
Median sale prices for existing Miami-Dade County single-family homes rose 12.5 percent in June to $315,000, according to the newly-released data. Existing condominiums increased 7.3 percent to $220,000. Single-family home prices have risen for 55 consecutive months. Condo prices have increased in 59 of the last 61 months, a stretch spanning more than five years.
Despite the increased prices, Miami properties remain at 2004 pricing 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.
Historic low interest rates are attracting buyers. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.57 percent in June, which is the lowest since May 2013 (3.54 percent).Total Sales Finish in Line with Miami Historical Averages
Total existing Miami-Dade County residential sales -- which posted a record year in 2013 and near record years in 2014 and 2015 -- decreased 8.6 percent year-over-year from 2,886 to 2,639.
Miami-Dade County single-family home transactions decreased 6.3 percent in June, from 1,383 to 1,296. While down from last year, the sales total is a strong number for the peak of home-buying season and is higher than the 1,280 homes sold in June 2014, which was a near-record year for Miami transactions. Existing condominium sales -- which declined 10.6 percent, from 1,503 to 1,343 -- are competing with new construction market, which continues to add inventory.
Single-family home sales are declining because of significant inventory shortage for properties priced below $300,000. Inventory has dropped 53 percent year-over-year for single-family homes priced below $300,000. Supply in the $250,000 to $300,000 sector, for instance, has decreased almost 50 percent in the last three years, declining from 4.9 months of supply in June 2013 to 2.7 in June 2016.
The lack of available distressed properties is playing a role. Total Miami distressed sales have declined 46.1 percent year-over-year, from 770 transactions in June 2015 to 415 last month. Only 15.7 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 26.7 percent in June 2015. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 3.1 and 12.6 percent, respectively, of total Miami sales in June 2016. Short sale transactions dropped 47.8 percent year-over-year while REOs fell 45.7 percent.
Non-distressed single-family home sales grew 11.3 percent in June, increasing from 986 to 1,097. Non-distressed properties comprise 41.6 percent of the market. Non-distressed single-family home prices are also increasing, rising 5.4 percent from $313,000 to $330,000.
Nationally, distressed sales comprised 6 percent of all sales in June, down from 8 percent a year ago, according to NAR.
Total existing Miami residential properties combined for $1.15 billion in total sales volume in June 2016. The total, which is down from $1.2 billion in June 2015, doesn't include new construction condo sales.Transactions in Popular Price Points Rise
Single-family homes priced between $250,000 and $600,000 saw a 10.7 percent year-over-year increase in June, growing from 606 to 671. The sector represented 51.8 percent of total Miami single-family home sales in June 2016.
Existing condos priced between $150,000 and $400,000 saw a 2.7 percent year-over-year rise in sales in June, increasing from 659 transactions to 677. This sector represented 50.4 percent of total existing Miami condo home sales in June 2016.Miami Real Estate Selling Faster and Close to List Price
The median number of days between listing and contract dates for Miami single-family home sales fell 13.0 percent year-over-year to 47 days. The median number of days between the listing date and closing date for single-family properties dropped 3.6 percent to 106 days.
For condos, the median time to contract decreased 4.3 percent year-over-year to 67 days. The median number of days between the listing date and closing date increased 0.8 percent to 119 days.
The median percent of original list price received for single-family homes was 95.5 percent in June 2016, an increase of 0.1 percent. The median percent of original list price received for existing condominiums was 94.2 percent, an increase of 0.3 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 is also impacting existing condominiums. Of the 9,307 condominium buildings in Miami-Dade and Broward Counties, only 13 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 climbed 1.1 percent to a seasonally adjusted annual rate of 5.57 million in June from a downwardly revised 5.51 million in May, according to NAR. Sales grew 3.0 percent from June 2015 (5.41 million) and remain at their highest annual pace since February 2007 (5.79 million).
Statewide, closed sales of existing single-family homes totaled 27,086 last month - slightly higher (0.4%) than the June 2015 level of 26,973 closed sales, according to Florida Realtors. Florida's condominium sales totaled 10,506 last month, down 2.6 percent compared to June 2015.
The national median existing-home price for all housing types in June was $247,700, up 4.8 percent from June 2015 ($236,300). June's price increase marks the 52nd consecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $225,000, up 10.8 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in June was $164,000, up 8.6 percent over the year-ago figure. Statewide median sales prices for single-family homes and condos have risen for 55 consecutive months.Miami's Cash Buyers Continue to Represent More than Twice the National Average
Miami cash transactions comprised 44.8 percent of June total closed sales, compared to 50.4 percent last year. Miami cash transactions are more than double the national average of 22 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 59.4 percent of condo closings were made in cash in June compared to 29.6 percent of single-family home sales.Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes increased 10.7 percent in June from 5,685 active listings last year to 6,292 last month. Inventory, however, has dropped 53 percent year-over-year for single-family homes priced below $300,000. Condominium inventory increased 18.6 percent to 14,093 from 11,885 listings during the same period in 2015.
Single-family homes have a 5.6-month supply, which indicates a sellers' market. Existing condominiums have an 11.2-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 June increased 16.2 percent year-over-year, from 17,540 to 20,385. Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes increased 2.4 percent from 1,818 in June of last year to 1,861 last month. New listings of condominiums increased 2.3 percent, growing from 2,273 to 2,326.
Nationally, total housing inventory at the end of June dipped 0.9 percent to 2.12 million existing homes available for sale, and is now 5.8 percent lower than a year ago (2.25 million). Unsold inventory is at a 4.6-month supply at the current sales pace, which is down from 4.7 months in May.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.
Developers are also being cautious not to overbuild. About 85 percent of condos under construction in downtown Miami are sold, according to Integra Realty Resources and the Miami Downtown Development Authority. Downtown Miami has about 7,200 units under construction, a smaller number than the 18,500 the area had under construction in 2006.
Miami's population growth and growing economy is leading to a significant demand for new properties. Fifty condo towers with 4,851 units have been completed in Miami-Dade County east of I-95 since the start of 2011, according to a July 18 report from preconstruction condo projects website Cranespotters.com and M.A.R.
There are 79 towers with 12,573 units under construction in Miami-Dade County east of I-95, the report showed. About 56 towers with 7,932 units are planned, but have not begun development. About 76 towers with 10,816 units are proposed in Miami-Dade County east of I-95.