Miami Condo Sales Jump 234.2% in April as Buyers Act on Higher Inventory
The Miami Association of Realtors recently reported that Miami-Dade County real estate posted its best April sales month in history as pent-up demand, more U.S. individuals and companies moving to South Florida, and record-low mortgage rates fueled a double-digit sales increase for the eighth consecutive month.
Miami-Dade County total home sales surged 151.3% year-over-year, from 1,576 to 3,960. Miami single-family home transactions rose 83.1%, from 865 to 1,584. Miami existing condo sales increased 234.2%, from 711 to 2,376.
This is far and away the best April selling month since MIAMI began tracking stats in 1993. The next best April occurred in April 2014 when Miami-Dade County had 2,712 total home sales, or 1,248 fewer than April 2021. Miami total home sales are up 50.6% in April 2021 vs. April 2019, from 2,630 to 3,960. Miami single-family home sales (25.2% increase) and condo transactions (74.1% jump) show major gains compared to April 2019.
"Miami recorded its best April sales month in history and the sales could have been even larger had there been more inventory," MIAMI Chairman of the Board Jennifer Wollmann said. "As is the situation in many major cities, inventory is low for single-family homes. The Miami condo market, however, is in a balanced market with 7.1 months of supply and buyers are taking advantage of the sector's healthy inventory and today's record low mortgage rates."
Lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply. More inventory is expected to come to the market later this year as potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
Miami Luxury Sales Jump as Northeast and West Coast Buyers Move to Mega Region
Miami single-family luxury ($1-million-and-up) transactions jumped 541.1% year-over-year to 359 sales in April 2021. Miami existing condo luxury ($1-million-and-up) sales increased 540.8% year-over-year to 314 transactions.
Comparing the April 2021 luxury stats to April 2019 also shows major surges. Miami single-family luxury sales surged 348.75% from April 2019 to April 2021. Miami condo luxury transactions jumped 230.5% from April 2019 to April 2021.
Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
Low interest rates; a robust 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.
Miami single-family homes priced between $400K to $600K surged 118.9% year-over-year to 521 transactions in April 2021. Miami existing condo sales priced between $400K to $600K increased 371.6% to 349 transactions.
Miami Homeowners' Home Equity Continues Surging as Many Pay Lower Mortgage Payments
With interest rates still at record lows, many South Florida homeowners have refinanced their home loans. So not only are many homeowners paying lower mortgage payments today; they are doing so while their wealth (home equity) has significantly increased. Home equity can be tapped for renovations, college loans and more.
Miami-Dade County single-family median prices increased 34.8% year-over-year in April 2021, increasing from $382,000 to $515,000. Miami single-family median prices have risen for 113 consecutive months, a streak of 9.4 years. Existing condo median prices increased 22.6% year-over-year, from $265,000 to $325,000. Condo median prices have increased or stayed even in 115 of the last 119 months.
Rising median prices is a trend nationwide as record-low mortgages rates and the increased availability of remote work and education has accelerated the demand for housing. Low inventory relative to high demand leads to prices rising.
Lower mortgage rates are making home purchases more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.06% in April, down from 3.08% in March. The average commitment rate across all of 2020 was 3.11%. NAR Chief Economist Lawrence Yun expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021, the increased inventory should ease the growth of median prices.
Miami remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 85 square meters of prime property, according to Knight Frank's 2021 The Wealth Report. Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35) and others offer significantly less prime land for $1 million.
Miami Dollar Volume Totals $3.5 Billion, Showcasing Impact Housing Plays in Local Economy
While other industries struggled over the past year, housing lifted the economy nationally and locally. For every two homes sold in the U.S., one job is created. Miami dollar volume showcases the impact housing plays in the local economy
Single-family home dollar volume increased 246.7% year-over-year, from $508.6 million to $1.8 billion. Condo dollar volume increased 457.9% year-over-year, from $296.9 million to $1.7 billion.
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 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 have championed, are expected to generate increased homeownership opportunities.
Miami Distressed Sales Stay Low, Reflecting Healthy Market
Only 1.5% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 4.2% in April 2020. In 2009, distressed sales comprised 70% of Miami sales. Total Miami distressed sales decreased 9.1%, from 66 to 60.
Short sales and REOs accounted for 0.4% and 1.1% year-over-year, respectively, of total Miami sales in April 2021. Short sale transactions decreased 13.3% year-over-year while REOs decreased 15.7%.
Nationally, distressed sales represented less than 1% of sales in April 2021, down from 3% in April 2020.
National, State Housing Demand Robust as More Inventory Expected to Arrive
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 2.7% from March to a seasonally-adjusted annual rate of 5.85 million in April. Sales overall jumped year-over-year, up 33.9% from a year ago (4.37 million in April 2020).
Statewide, Closed sales of single-family homes in April totaled 33,264, up 55.4% year-over-year, while existing condo-townhouse sales totaled 17,330, up 130.9% over April 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, the median existing-home price for all housing types in April was $341,600, up 19.1% from April 2020 ($286,800), as every region recorded price increases. This is a record high and marks 110 straight months of year-over-year gains.
The statewide median sales price for single-family existing homes was $336,525, up 22.4% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month's statewide median price for condo-townhouse units was $250,000, up 19.6% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Homebuyers Targeting Miami Existing Condos: 3.5 Times More Inventory than Single-Family
Inventory of single-family homes decreased 54.7% in April 2021 from 6,076 active listings last year to 2,754 last month. Condominium inventory decreased 33.4% to 9,726 from 14,599 listings during the same period in 2020. Inventory of active listings has decreased the last 20 months for single-family homes.
Months supply of inventory for single-family homes decreased 60.7% to 2.2 months, which indicates a seller's market. Inventory for existing condominiums decreased 44.5% to 7.1 months, which indicates a balanced 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 April 2021 decreased 39.6% year-over-year, from 20,675 to 12,480.
New listings of Miami single-family homes increased 61.6% to 1,773 from 1,097. New listings of condominiums increased 103.6%, from 1,266 to 2,577.
Nationally, total housing inventory at the end of April amounted to 1.16 million units, up 10.5% from March's inventory and down 20.5% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, slightly up from March's 2.1-month supply and down from the 4.0-month supply recorded in April 2020. These numbers continue to represent near-record lows. NAR first began tracking the single-family home supply in 1982.
Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 97.9% in April 2021, up 2% from 96% last year. The median percent of original list price received for existing condominiums was 95.3%, up 1% from 94.4% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 20 days, a 48.7% decrease from 39 days last year. The median number of days between the listing date and closing date for condos was 53 days, up 1.9% from 52 days.
The median time to sale for single-family homes was 70 days, a 15.7% decrease from 83 days last year. The median number of days to sale for condos was 95 days, a 1% decrease from 96 days.
Miami Cash Sales More than National Figure: Miami Top Market for Global Buyers
Cash sales represented 37.8% of Miami closed sales in April 2021, compared to 22.1% in April 2020. About 25 percent of U.S. home sales 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 as well as some moving from more expensive U.S. markets who can buy more with their profits from real estate sales.
Cash sales accounted for 46.5% of all Miami existing condo sales and 24.7% of single-family transactions.