According to the Miami Association of Realtors, Miami-Dade County total home sales surged in November 2020 as strong pent-up demand and record-low mortgage rates fueled transactions.
Miami-Dade County total home sales jumped 20.9% year-over-year, from 2,033 to 2,459. Miami single-family home sales jumped 18.7% year-over-year, from 972 to 1,154. Miami existing condo transactions increased 23% year-over-year, from 1,061 to 1,305. Miami single-family home sales have now posted double-digit, year-over-year increases for four consecutive months and Miami existing condos have posted transaction gains for three straight months.
"The pandemic has prioritized the importance and value of our homes," MIAMI Chairman of the Board Jorge L. Guerra Jr. said. "More than ever home has become the focal point of our lives, and consumers want more space and convenience. Remote work, home schooling, record-low mortgage rates, low inventory and purchases from tax-burdened Northeastern home buyers are some of the factors boosting Miami real estate."
Miami year-to-date November home sales are only 6.6% lower than last year despite the four-month interruption caused by the pandemic. Year-to-date dollar volume has already exceeded the 2019 total. Inventory has decreased the last 16 months for single-family homes and now sits at 3.6 months supply of inventory.
"The lack of inventory in certain price points is impacting sales, particularly for single-family homes," Guerra said. "Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply."
Miami Luxury Home Sales Surge 120.3% in November 2020
Miami single-family homes priced between $400K to $600K surged 50.4% year-over-year to 352 transactions in November 2020. Miami existing condo sales priced between $400K to $600K increased 68.3% to 138 transactions.
Miami single-family luxury ($1-million-and-up) transactions jumped 120.3% year-over-year to 163 sales in November 2020. Miami existing condo luxury ($1-million-and-up) sales increased 88.2% year-over-year to 96 transactions.
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.
108 Consecutive Months of Price Appreciation in Miami
Strong demand coupled with limited supply continue to drive price appreciation in Miami-Dade.
Miami-Dade County single-family home prices increased 23.3% year-over-year in November 2020, increasing from $365,000 to $450,000. Miami single-family home prices have risen for 108 consecutive months, a streak of 9 years. Existing condo prices increased 10.2% year-over-year, from $245,000 to $270,000. Condo prices have increased or stayed even in 110 of the last 114 months.
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.
Single-Family Home and Condo Dollar Volume Increases
Single-family home dollar volume increased 77.1% year-over-year, from $526.7 million to $932.6 million. Condo dollar volume increased 55.5% year-over-year, from $377 million to $586.1 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 2.77% in November, down from 2.83% in October. The average commitment rate across all of 2019 was 3.94%.
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 13 are approved for Federal Housing Administration loans, down from 29 last year, according to the Florida Department of Business and Professional Regulation and FHA.
A better condo approval process is expected to increase sales. The guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR has championed, are expected to generate increased homeownership opportunities.
Only 1.9% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 6.3% in November 2020. In 2009, distressed sales comprised 70% of Miami sales. Total Miami distressed sales decreased 64.1%, from 128 to 46.
Short sales and REOs accounted for 0.4% and 1.4% year-over-year, respectively, of total Miami sales in November 2020. Short sale transactions decreased 60.7% year-over-year while REOs decreased 65%.
Nationally, distressed sales represented less than 1% of sales in November, equal to October's percentage but down from 2% in November 2019.
Miami Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 97.1% in November, up 1.6% from 95.6% last year. The median percent of original list price received for existing condominiums was 94.5%, up 0.7% from 93.8% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 23 days, a 57.4% decrease from 54 days last year. The median number of days between the listing date and closing date for condos was 50 days, down 35.9% from 78 days.
The median time to sale for single-family homes was 74 days, a 22.9% decrease from 96 days last year. The median number of days to sale for condos was 96 days, a 19.3% decrease from 119 days.
Miami's Cash Buyers Top National Figure
Miami cash transactions comprised 28.9% of November 2020 total closed sales, compared to 35.1% last year. The national figure for cash buyers is 20%.
Miami's high percentage of cash sales reflects South Florida's ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami's cash purchases as 38.9% of condo closings were made in cash in November 2020 compared to 17.9% of single-family home sales.
Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes decreased 40.4% in November from 6,526 active listings last year to 3,889 last month. Condominium inventory decreased 10.1% to 13,820 from 15,369 listings during the same period in 2019.
Inventory of active listings has decreased the last 16 months for single-family homes.
Months supply of inventory for single-family homes decreased 40% to 3.6 months, which indicates a seller's market. Inventory for existing condominiums decreased 1.5% to 13 months, which indicates a buyer's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Months supply of inventory is down since July 2019 for single-family, reflecting strong demand.
Total active listings at the end of November decreased 19.1% year-over-year, from 21,895 to 17,709. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Miami single-family homes decreased 3.1% to 1,393 from 1,438. New listings of condominiums increased 4.4%, from 2,005 to 2,094.