According to the Miami Association of Realtors, Miami-Dade County home prices increased year-over-year in 2Q 2020.
Miami single-family home prices increased 5.6% year-over-year, from $360,000 to $380,000. Miami existing condo prices rose 6.2%, from $247,000 to $262,250. Median prices have now increased for 34 consecutive quarters, a streak spanning 8.5 years.
"Historically low mortgage rates, virtual tools and services, and pent-up demand have many buyers continuing their home buying process, which is generating strong demand from local and out-of-state buyers, particularly those in high tax and high-density areas," Miami Realtors' Chairman of the Board Jorge L. Guerra Jr. said.
Pending sales began surging in mid-April and are stronger than they were before the COVID-19 stay home orders. New pending sales for Miami-Dade single-family homes decreased 8.9% year-over-year, from 4,482 to 4,081. New pending sales for Miami-Dade condos decreased 33.3% year-over-year, from 4,499 to 3,003.
Mortgage applications, another indicator of future sales, are on the rise in South Florida and nationally, as the Miami mega region continues to see additional homebuying interest from the Northeast. The Mortgage Bankers Association (MBA) reported that mortgage applications rose by 6.8% this week.
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.
Total Miami Sales Declined in 2Q 2020
Miami total home sales decreased 39.4% year-over-year, from 7,861 to 4,766. Miami single-family home sales fell 30.3%, from 3,854 to 2,688. Miami condo sales declined 48.1%, from 4,007 to 2,078.
Miami single-family home dollar volume declined 23.5%, from $2 billion to $1.6 billion. Miami condo dollar volume decreased 46.7% to $858.8 million. The sales do not include Miami's multi-billion-dollar new construction condo market.
Non-distressed sales comprised about 95.1% of all closed residential sales in 2Q 2020 vs. 93.9% in 2Q 2019. Only 4.9% of all closed residential sales in Miami were distressed in 2Q 2020, including REO (bank-owned properties) and short sales, compared to 6.1% in 2Q 2019. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 1.2% and 3.8%, respectively, of total Miami sales in 2Q 2020. Short sale transactions decreased 37.8% year-over-year while REOs fell 53.7%.
Lower mortgage rates made home purchases more affordable in 2020. The effective 30-year fixed mortgage rate averaged 3.29% in the second quarter of 2020, down from one year ago (4.08%) and from the first quarter of 2020 (3.57%).
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 2Q 2020:
1. The Hammocks, a community in south Miami-Dade east of The Crossings, had 1.8 months supply.
2. Cutler Bay, a town in south Miami-Dade County, had 2.2 months supply.
3. Miami Gardens, a city in north Miami-Dade north of Opa-locka, had 2.4 months supply.
4. Homestead, a south Miami-Dade city, had 2.6 months supply.
4. Princeton, a community in south Miami-Dade south of Cutler Bay, had 2.6 months supply.
1. Kendale Lakes, a south Miami-Dade community west of South Miami, had 2.4 months supply.
2. Kendall, a south Miami-Dade community west of Pinecrest, had 3.7 months supply.
3. Homestead, a south Miami-Dade city, had 4.2 months supply
3. Fountainebleau, a community in south Miami-Dade County north of Westchester, had 4.2 months supply
4. Hialeah, a city in north Miami-Dade west of Miami Shores, had 4.3 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 4.8 months of inventory for single-family homes and 14 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.
Miami real estate had 19,362 active listings in 2Q 2020, a 12.4% decrease from the 22,111 listings at the same time last year. The inventory for single-family homes decreased 25.6%, from 6,623 to 4,929. Miami existing condo inventory decreased 6.8%, from 15,488 to 14,433.
Miami Homes Selling Close to List Price
The median percent of original list price received was 95.9% for single-family homes and 93.6% for condos in 2Q 2020.
The median time to contract for single-family home listings was 55 days, a 5.2% decrease from 58 days in 2Q 2019. The median time to contract for existing condos was 77 days, a 1.3% increase from 76 days in 2Q 2019.
The median time to sale for single-family homes decreased 2.9%, from 103 days to 100. The median time to sale for existing condos increased 4.3%, from 117 to 122.
Miami Cash Sales Higher than National Figure
Cash sales represented 24.7% of Miami closed sales in 2Q 2020, compared to 34.4% in 2Q 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 37.1% of all Miami existing condo sales and 15.1% of single-family transactions.