According to the Miami Association of Realtors, Miami-Dade County total home sales posted a double-digit increase for the fifth consecutive month in January 2021 as pent-up demand and record-low mortgage rates continue fueling transactions.
Miami-Dade County total home sales jumped 19.1% year-over-year in January 2021, from 1,857 to 2,211. Miami single-family home sales rose 9.1% year-over-year, from 887 to 968. Miami existing condo transactions increased 28.1% year-over-year, from 970 to 1,243.
"Double-digit home sale increases for five consecutive months speaks to the resiliency of the Miami real estate market, the global pent-up demand for South Florida properties, record-low mortgage rates, purchases from home buyers in tax-burdened states, the importance of the home as a hub in our daily lives and increased interest from international buyers," MIAMI Chairman of the Board Jennifer Wollmann said.
Miami real estate accounted for 12,918 total home sales in the five-month stretch from September 2020 to January 2021. That is a 18.4% increase in the number of total transactions compared to the five-month stretch from September 2019 to January 2020.
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.
Miami Luxury Condo Sales Surge 130.6% in January 2021
Miami single-family luxury ($1-million-and-up) transactions jumped 114.1% year-over-year to 167 sales in January 2021. Miami existing condo luxury ($1-million-and-up) sales increased 130.6% year-over-year to 113 transactions.
Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
Miami single-family homes priced between $400K to $600K surged 51.5% year-over-year to 294 transactions in January 2021. Miami existing condo sales priced between $400K to $600K increased 64.5% to 153 transactions.
Record-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.
110 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 25.2% year-over-year in January 2021, increasing from $375,000 to $469,500. Miami single-family home prices have risen for 110 consecutive months, a streak of more than 9 years. Existing condo prices increased 14.3% year-over-year, from $245,000 to $280,000. Condo prices have increased or stayed even in 112 of the last 116 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 86.4% year-over-year, from $471.7 million to $879.2 million. Condo dollar volume increased 69.4% year-over-year, from $393.9 million to $667.1 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.74% in January, up from 2.68% in December. The average commitment rate across all of 2020 was 3.11%.
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 1.8% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 5.9% in January 2020. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 64.5%, from 110 to 39.
Short sales and REOs accounted for 0.7% and 1.1% year-over-year, respectively, of total Miami sales in January 2021. Short sale transactions decreased 37.5% year-over-year while REOs decreased 72.1%.
Nationally, distressed sales represented less than 1% of sales in January 2021, down from 2% in January 2020.
Miami Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 96.8% in January 2021, up 1.3% from 95.6% last year. The median percent of original list price received for existing condominiums was 94.3%, up 1% from 93.4% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 28 days, a 44% decrease from 50 days last year. The median number of days between the listing date and closing date for condos was 63 days, down 23.2% from 82 days.
The median time to sale for single-family homes was 80 days, a 18.4% decrease from 98 days last year. The median number of days to sale for condos was 111 days, a 9.8% decrease from 123 days.
National and State Statistics
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.6% from December to a seasonally-adjusted annual rate of 6.69 million in January. Sales in total climbed year-over-year, up 23.7% from a year ago (5.41 million in January 2020).
In January, closed sales of single-family homes statewide totaled 21,587, up 18% year-over-year, while existing condo-townhouse sales totaled 9,608, up 24.6% over January 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 January was $303,900, up 14.1% from January 2020 ($266,300), as prices increased in every region. January's national price jump marks 107 straight months of year-over-year gains.
The statewide median sales price for single-family existing homes was $305,000, up 15.1% 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 $230,000, up 15% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Miami's Cash Buyers Top National Figure
Miami cash transactions comprised 33.1% of January 2021 total closed sales, compared to 33.8% last year. The national figure for cash buyers is 19%.
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 43% of condo closings were made in cash in January 2021 compared to 20.4% of single-family home sales.
Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes decreased 45.8% in January 2021 from 6,277 active listings last year to 3,401 last month. Condominium inventory decreased 15.4% to 12,608 from 14,902 listings during the same period in 2020.
Inventory of active listings has decreased the last 17 months for single-family homes.
Months supply of inventory for single-family homes decreased 44.6% to 3.1 months, which indicates a seller's market. Inventory for existing condominiums decreased 9.6% to 11.3 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 January 2021 decreased 24.4% year-over-year, from 21,179 to 16,009. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Miami single-family homes decreased 13.7% to 1,541 from 1,785. New listings of condominiums increased 1.3%, from 2,468 to 2,500.
Nationally, total housing inventory at the end of January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million). Unsold inventory sits at a 1.9-month supply at the current sales pace, equal to December's supply and down from the 3.1-month amount recorded in January 2020. NAR first began tracking the single-family home supply in 1982.