Miami existing condo sales increased in October and luxury home transactions posted double-digit gains as Miami real estate returned to normalcy after Hurricane Irma-related tree debris and power outages delayed inspections, appraisals and closings the past two months, according to a new report by the MIAMI Association of REALTORS® (MIAMI) and the Multiple Listing Service (MLS) system.
Miami existing condo sales — which are competing with one of the most robust new construction markets in the country — increased 1.5 percent year-over-year, from 983 to 998. Miami single-family homes stayed effectively even, decreasing 0.4 percent from 997 sales to 993. Luxury $1-million-plus sales, meanwhile, jumped 22.2 percent for single-family homes and 9.8 percent for condominiums.
“Delays in getting clean-up crews, inspectors and appraisers out to properties after Hurricane Irma stalled many Miami closings the last two months,” said Christopher Zoller, the 2017 MIAMI chairman of the board. “Now that re-inspections are being completed and tree debris has been mostly removed, Miami real estate is back to another strong month of home sales. The rise in luxury home sales showcases the strength of Miami’s market fundamentals.”
Miami Real Estate Resilient after Hurricanes
- History shows Miami home sales bounce back relatively quickly after a hurricane as long as there’s no major structural damage.
- MIAMI housing statistics, which date back to 1994, detail the market’s resilient nature. In October 2005, Hurricane Wilma left similar if not more damage, mostly fallen trees, in Miami.
- Miami single-family home sales increased 23.6 percent in the 60 days after Hurricane Wilma in October 2005.
Single-Family Luxury Sales Jump 22.2 Percent, Condos up 9.8 Percent
- Miami single-family $1 million-plus transactions increased 22.2 percent, from 54 to 66. Miami existing condo luxury sales jumped 9.8 percent, from 51 to 56.
- The luxury increase follows a trend the Miami market was seeing before Hurricane Irma brought a temporary reduction to sales. A recent lowering of luxury asking prices, the potential for interest rates hikes and Congress’ planned tax reform could be leading luxury buyers to come off the sidelines.
- Luxury $1-million-plus single-family sales jumped for five consecutive months, from February to July 2017. Luxury condo sales increased for two consecutive months in June (8.7 percent year-over-year increase) and July (51.1 percent year-over-year increase).
Total Miami Home Sales, Pending Transactions Increase in October
- Total existing Miami-Dade County residential sales — which posted a record year in 2013 and near record years in 2014 and 2015 — increased 0.6 percent year-over-year from 1,980 to 1,991.
- November housing sales could also be solid for Miami. New pending sales, which is the number of listed properties that went under contract, increased year-over-year for both Miami single-family and condos in October. New pending sales rose 2.3 percent for single-family homes and 7 percent for condos.
- 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 12 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
- Total sales volume for all properties accounted for $846 million last month. These sales do not include Miami’s multi-billion dollar new construction condo market.
Nearly Six Years of Price Appreciation in Miami
- Miami-Dade County single-family home prices increased 9.7 percent in October 2017, increasing from $310,000 to $340,000. Miami single-family home prices have now risen for 71 consecutive months, a streak spanning nearly six years. Existing condo prices rose 1.1 percent, from $214,000 to $216,250 in October. Condo prices have increased in 74 of the last 77 months.
- Miami real estate remains a 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.
- According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.90 percent in October 2017; it averaged 3.47 percent during the same month a year earlier.
Miami Distressed Sales Continue to Drop
- Only 9.7 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 14.8 percent in October 2016. In 2009, distressed sales comprised 70 percent of Miami sales.
- Total Miami distressed sales declined 34 percent year-over-year, from 294 to 194 last month.
- Short sales and REOs accounted for 2.7 and 7.1 percent, respectively, of total Miami sales in October 2017. Short sale transactions dropped 31.2 percent year-over-year while REOs fell 35 percent.
- Nationally, distressed sales accounted for 4 percent of sales in October, unchanged from 5 percent a year ago.
Miami Real Estate Selling Close to List Price
- The median number of days between listing and contract dates for Miami single-family home sales was 47 days, a 6 percent decrease from 50 days last year. The median number of days between the listing date and closing date for single-family properties was 102 days, a 1.9 percent decrease from 104 days.
- The median time to contract for condos rose 2.6 percent to 80 days from 78 days. The median number of days between listing date and closing date increased 2.4 percent to 128 days.
- The median percent of original list price received for single-family homes was 95.4 percent. The median percent of original list price received for existing condominiums was 93.7 percent.
National and State Statistics
- Nationally, total existing-home sales increased 2.0 percent to a seasonally adjusted annual rate of 5.48 million in October from a downwardly revised 5.37 million in September. After last month's increase, sales are at their strongest pace since June (5.51 million), but still remain 0.9 percent below a year ago.
- Statewide closed sales of existing single-family homes totaled 20,543 last month, up 2 percent compared to October 2016, according to Florida Realtors. Statewide closed condo sales totaled 8,116 last month, up 2.2 percent compared to October 2016.
- The national median existing-home price for all housing types in October was $247,000, up 5.5 percent from October 2016 ($234,100). October's price increase marks the 68th straight month of year-over-year gains.
- The statewide median sales price for single-family existing homes last month was $235,558, up 7.1 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties was $170,000, up 5.2 percent over the year-ago figure. October was the 70th month-in-a-row that statewide median prices for both sectors rose year-over-year.
Miami’s Cash Buyers Represent almost Double the National Figure
- Miami cash transactions comprised 37.6 percent of October total closed sales, compared to 43.3 percent last year. Miami cash transactions are almost double the national figure (20 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. Miami has a higher percent of cash sales for condos due to lack of financing approvals for buildings.
- Condominiums comprise a large portion of Miami’s cash purchases as 52.8 percent of condo closings were made in cash in October compared to 22.2 percent of single-family home sales.
Seller’s Market for Single-Family Homes, Supply Declines in October
- Inventory of single-family homes decreased 4.8 percent in October from 6,459 active listings last year to 6,152 last month. Condominium inventory increased 5.6 percent to 15,222 from 14,408 listings during the same period in 2016.
- Monthly supply of inventory for single-family homes decreased 3.4 percent to 5.7 months, which indicates a seller’s market. Existing condominiums have a 14.0-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 October increased 2.4 percent year-over-year, from 20,867 to 21,374. Active listings remain about 60 percent below 2008 levels when sales bottomed.
- New listings of Miami single-family homes increased 9.3 percent to 1,706 from 1,561. New listings of condominiums increased 21.4 percent, from 2,036 to 2,471. The increases come from homeowners who had planned to list their properties in September but were delayed as crews cleaned properties after Hurricane Irma.
- Nationally, total housing inventory at the end of October decreased 3.2 percent to 1.80 million existing homes available for sale, and is now 10.4 percent lower than a year ago (2.01 million) and has fallen year-over-year for 29 consecutive months. Unsold inventory is at a 3.9-month supply at the current sales pace, which is down from 4.4 months a year ago.
Note: Statistics in this report were provided by the MIAMI Association of REALTORS®