With 2 months still left to go beyond October's sales numbers
Miami Realtors are reporting this week that Miami-Dade County real estate broke its record for the most annual home sales in only 10 months as October 2021 transactions surged year-over-year.
The red-hot market, which set its all-time annual condo sales record last month, has two more months to push its many 2021 records even higher and build on others as Miami's all-time annual single-family home sales record is poised to be broken next month.
Miami-Dade County total home sales rose 8.8% year-over-year in October 2021, from 2,737 sales to 2,978. Miami single-family home transactions decreased 12.4%, from 1,326 to 1,161 because of lack of inventory and Covid19 comps (stats are in comparison to major rebound demand last year). Miami existing condo sales increased 28.8%, from 1,411 to 1,817.
Year-to-date, Miami has registered 32,940 existing total homes sales in 10 months, which surpasses the previous annual record of 30,041 transactions in the entire year of 2013, an increase of 9.7%.
"Miami home sales were rising before the pandemic, but the expansion of remote work has accelerated the demand for Miami real estate," MIAMI Chairman of the Board Jennifer Wollmann said. "If you can work from anywhere, why wouldn't you want to live where you can be outside 365 days a year? Why wouldn't you want to live in a region that is attracting many tech and financial firms with high-paying jobs, a city with the most international flair, a news-making culinary scene, world-class shopping and more?"
Best October Sales Month in Miami History
Of the top-10 best home sales months in Miami history, eight have happened this year. June 2021 (with its 4,057 total transactions) remains the No. 1 overall sales month in Miami history. October 2021 (with its 2,978 sales) ranks as the ninth-best sales month overall since MIAMI began tracking stats in 1993.
Miami home sales are also significantly higher vs. October 2019. Miami total home sales are up 26.5% in October 2021 vs. October 2019, from 2,355 to 2,978. Miami single-family home sales (1.3% increase) and condo transactions (50.3% jump) are higher than October 2019.
Miami Luxury Sales Jump as Northeast and West Coast Buyers Move to Mega Region
Miami single-family luxury ($1-million-and-up) transactions rose 9.9% year-over-year to 188 sales in October 2021. Miami existing condo luxury ($1-million-and-up) sales surged 113.8% year-over-year to 171 transactions.
There are 3.8 months of supply in luxury single-family homes; 8.8 months of supply in luxury condos. 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.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers are coming here for the vaccine and purchasing property.
Vaccinated foreigners were allowed to resume travel to the U.S. back on Nov. 8 and that will lead to more international investment in South Florida - the No. 1 destination for foreign buyers. Global buyers purchase in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures.
Miami single-family homes priced between $400K to $600K increased 10.4% year-over-year to 468 transactions in October 2021. Miami existing condo sales priced between $400K to $600K increased 106.9% to 300 transactions.
New Listings Rise for Condos; More Inventory Arriving for Low-Supply/High-Demand Market Next Year
There is always a seasonal fade in inventory in the fall and winter. More inventory is expected to come to the market in 2022 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.
New listings of Miami single-family homes decreased 1.7% to 1,566 from 1,593. New listings of condominiums increased 1.4%, from 2,396 to 2,429.
Inventory of single-family homes decreased 26% year-over-year in October 2021 from 3,941 active listings last year to 2,918 last month. Condominium inventory decreased 45.4% year-over-year to 7,652 from 14,004 listings during the same period in 2020.
Months' supply of inventory is down since July 2019 for single-family, reflecting strong demand. Months' supply of inventory for single-family homes decreased 40.5% to 2.2 months, which indicates a seller's market. Inventory for existing condominiums decreased 70.4% to 4 months, which indicates a seller's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of October 2021 decreased 41.1% year-over-year, from 17,945 to 10,570.
Nationally, total housing inventory at the end of October amounted to 1.25 million units, down 0.8% from September and down 12.0% from one year ago (1.42 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, equal to September's supply, and down from 2.5 months in October 2020.
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 12.6% year-over-year in October 2021, increasing from $435,000 to $490,000. Miami single-family median prices have risen for 119 consecutive months, a streak of nearly 10 years. Existing condo median prices increased 21.9% year-over-year, from $268,000 to $326,790. Condo median prices have increased in most of the 121 of the last 125 months.
The greater share of Miami luxury sales in 2021 compared to a year ago is part of the reason for the large year-over-year increase in median prices.
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 3.07 in October, up from 2.90% in September. The average commitment rate across all of 2020 was 3.11%.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021 and 2022, 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 $1.9 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.
Miami total dollar volume totaled $1.9 billion in October 2021. Single-family home dollar volume increased 1.3% year-over-year, from $988.3 million to $1 billion. Condo dollar volume increased 74.2% year-over-year, from $549.9 million to $957.6 million.
Miami Distressed Sales Keep Dropping, 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 2.6% in October 2020. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 37.5% year-over-year in October 2021, from 72 to 45. Short sales and REOs accounted for 0.6% and 0.9% year-over-year, respectively, of total Miami sales in October 2021. Short sale transactions decreased 24% year-over-year while REOs decreased 44.7%.
Nationally, distressed sales represented less than 1% of sales in October, equal to the percentage seen a month prior and equal to October 2020.
Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 98.7% in October 2021, up 1.8% from 97% last year. The median percent of original list price received for existing condominiums was 97.3%, up 3.1% from 94.4% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 22 days, a 21.4% decrease from 28 days last year. The median time to sale for single-family homes was 69 days, a 11.5% decrease from 78 days last year.
The median number of days between the listing date and contract date for condos was 34 days, down 45.2% from 62 days. The median number of days to sale for condos was 79 days, a 23.3% decrease from 103 days.
Miami Cash Sales 54.2% More than National Figure in October 2021
Cash sales represented 37% of Miami closed sales in October 2021, compared to 29.3% in October 2020. About 24% 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 45.7% of all Miami existing condo sales and 23.4% of single-family transactions.