Miami’s single-family homes market registered its best March in history while home sales for all properties, median prices and total dollar volume increased, according to a new report by the MIAMI Association of REALTORS® (MIAMI) and the Multiple Listing Service (MLS) system.
Single-family home sales increased 9.2 percent year-over-year in March, expanding from 1,168 to 1,276. The 1,276 homes are Miami real estate’s highest March total, surpassing the previous record of 1,242 single-family homes sold in March 2015. Sales for existing condominiums, which are competing with a multi-billion dollar new construction market, rose 2.3 percent year-over-year in March.
“Miami’s spring home buying season is off to a roaring start,” said Coral Gables Realtor Christopher Zoller, the 2017 MIAMI chairman of the board. “Not only did single-family home sales post a historic total, but existing condominium sales also increased. The local jobs market is solid, average pay is rising and mortgage rates are still at historic lows.”
The possibility of higher interest rates pushed some buyers off the sidelines in March, which is traditionally the start of a busy spring and summer season for selling homes. Miami single-family homes in the mid-market ($250K to $600K) continue to be a popular price point.
Despite recent increases, mortgage rates remain at historic lows. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage is 4.20 percent.
Total existing Miami-Dade County residential sales — which posted a record year in 2013 and near record years in 2014 and 2015 — increased 5.6 percent year-over-year from 2,465 to 2,603.
A closer look at Miami single-family home sales in March shows a 37.5 percent rise in home sales for properties listed between $250,000 to $600,000. Homes sold in the $250K to $600K range represent 57.5 percent of total Miami single-family home sales.
Sales for Miami single-family homes listed from $600,000 to $1 million increased 51.9 percent in March, from 79 to 120.
Miami single-family traditional sales, or non-distressed transactions, rose 18.4 percent. This growth in traditional sales, from 942 to 1,115 transactions, shows Miami real estate is healthy and continues to grow.
Total sales volume for all properties accounted for $1.17 billion last month, a 17.4 percent increase from the $996.5 million sales volume a year ago. These sales do not include Miami’s multi-billion dollar new construction condo market.
Miami-Dade County single-family home prices jumped 15 percent in March 2017, increasing from $280,000 to $322,000. Miami single-family home prices have now risen for 64 consecutive months, a streak spanning more than five years. Existing condo prices increased 7.4 percent, from $209,500 to $225,000. Condo prices have increased in 68 of the last 70 months.
Despite the rise in prices, Miami real estate remains a major bargain. A 120-square meter condominium in Miami-Fort Lauderdale-Miami Beach cost $170,000 in 2016 Q3, according to the National Association of REALTORS® (NAR). The average cost of a 120-square meter apartment in 2016 in the prime inner city areas of London ($4.1 million), Hong Kong ($3.1 million), and New York ($2.2 million) were at least ten times higher, according to Global Property Guide.
Total Miami distressed sales declined 39.4 percent year-over-year, from 480 to 291 last month. Only 11.2 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 19.5 percent in March 2016. In 2009, distressed sales comprised 70 percent of Miami sales.
Short sales and REOs accounted for 2.6 and 8.6 percent, respectively, of total Miami sales in March 2017. Short sale transactions dropped 15 percent year-over-year while REOs fell 44.3 percent.
Nationally, distressed sales accounted for 6 percent of March sales, down from 8 percent a year ago.
The median number of days between listing and contract dates for Miami single-family home sales was 51 days, a 17.7 percent decrease from 62 days last year. The median number of days between the listing date and closing date for single-family properties decreased 7.9 percent to 105 days.
For condos, the median time to contract increased 22.1 percent to 83 days. The median number of days between the listing date and closing date increased 6.0 percent to 124 days.
The median percent of original list price received for single-family homes increased 0.2 percent to 95.3 percent. The median percent of original list price received for existing condominiums decreased 0.3 percent to 93.5 percent.
In addition to competing sales from new construction units, the lack of access to mortgage loans continues to impact existing condominiums. Of the 9,307 condominium buildings in Miami-Dade and Broward Counties, only 12 are approved for Federal Housing Administration loans, down from 29 last year, according to statistics from the Florida Department of Business and Professional Regulation and FHA.
Nationally, total existing-home sales ascended 4.4 percent to a seasonally adjusted annual rate of 5.71 million in March from a downwardly revised 5.47 million in February. March’s sales pace is 5.9 percent above a year ago.
Statewide closed sales of existing single-family homes totaled 25,921 last month, up 9.3 percent compared to March 2016, according to Florida Realtors. Statewide closed condo sales totaled 11,193 last month, up 11.4 percent compared to March 2016.
The national median existing-home price for all housing types in March was $236,400, up 6.8 percent from March 2016 ($221,400). March’s price increase marks the 61st consecutive month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $231,900, up 10.4 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in March was $171,000, up 9.4 percent over the year-ago figure. March marked the 64th consecutive month that statewide median prices for both sectors rose year-over-year.
Miami cash transactions comprised 43.8 percent of March total closed sales, compared to 48.6 percent last year. Miami cash transactions are almost double the national figure (23 percent). Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami’s cash purchases as 59.6 percent of condo closings were made in cash in March compared to 27.4 percent of single-family home sales.
Inventory of single-family homes decreased 2.1 percent in March from 6,494 active listings last year to 6,355 last month. Condominium inventory increased 10.5 percent to 15,416 from 13,952 listings during the same period in 2016.
Single-family homes have a 5.8-month supply, which indicates a seller’s market. Existing condominiums have a 13.8-month supply, which indicates a buyer’s market. A balanced market between buyers and sellers offers between six and nine months supply of inventory.
Total active listings at the end of March increased 6.5 percent year-over-year, from 20,446 to 21,771, Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes decreased 0.4 percent, from 1.942 to 1,934. New listings of condominiums increased 2.6 percent, from 2,683 to 2,752.
Nationally, total housing inventory at the end of March increased 5.8 percent to 1.83 million existing homes available for sale, but is still 6.6 percent lower than a year ago (1.96 million) and has fallen year-over-year for 22 straight months. Unsold inventory is at a 3.8-month supply at the current sales pace (unchanged from February).
Most Miami preconstruction condo developers require a 50-percent cash deposit on new units. The deposit is not only one of the highest in the United States but is significantly higher than the 20 percent required during the last real estate cycle. The large cash deposits show how committed Miami’s preconstruction condo buyers are to the local market.
Seventy-seven condo towers with 7,445 units have been completed in Miami-Dade County east of I-95 in the last six years since the start of 2011, according to an April 10 report from preconstruction condo projects website Cranespotters.com and MIAMI.
Source: MIAMI Association of REALTORS