Miami continues to see steady growth in its residential property market
Median residential sales in Miami, one of the US’s most dynamic real estate markets, continued rising last month and have now been increasing for more than three years.
Indeed the latest figures from the Miami Association of Realtors shows that single family home sales registered double digit growth in February and set an all-time Miami annual record in 2014, up 14.2% compared to February 2014.
Existing condominium sales posted the second best year in Miami history in 2014 despite an increase in new condo construction and rose 1.4% from February of last year. Combined, Miami-Dade County residential real estate sales increased 6.8% compared to the same time period in 2014.
‘Miami residential home sales continue to grow at a moderate rate. Seller confidence and buyer demand in the Miami real estate market is leading to more active listings and higher sale prices,’ said Christopher Zoller, the association’s residential president.
The data also shows that family home prices increased again in February but remain at affordable 2004 levels despite more than three years of consistent year on year increases. Condo prices also increased in February 2015, marking 44 months of growth in the last 45 months.
The median sale price for single family homes increased 7.9% to $245,000 in February 2015 from $227,000 in February 2014. The average sale price for single family homes increased 4% to $431,746 last month from $415,312 during the same time period last year.
Compared to February 2014, the median sale price for condominiums increased 6.8% to $189,000 from $177,000 a year prior. The average sale for condominiums increased 8.4% to $365,856 from $337,382 in February 2014.
Miami single family homes and condominiums continue to sell close to asking price, reflecting a strong consumer demand. The median number of days on the market for single family homes sold in February 2015 was just 46 days, a decrease of 2.1% compared to the same period in 2014. The average percent of original list price received was 94.6%, down a negligible 0.6% from a year earlier.
The median number of days on the market for condominiums sold in February 2015 was 65 days, an increase of 14% compared to the same period in 2014. The average percent of original list price received was 93.3%, a 1.8% decrease.
Cash sales in Miami increased relative to last month, but are down compared to the same time period last year. Access to mortgage loans for condominium buyers remains limited. The lack of Federal Housing Administration loans for a large number of existing Miami condominium buildings is preventing further market strengthening.
In Miami-Dade County, 58.8% of total closed sales in February 2015 were all cash transactions, up from 57.2% from the previous month. Cash deals in Miami are down relative to February 2014 when 62.5% of transactions were all cash.
Miami condominiums comprise a large portion of Miami’s cash purchases as 71.1% of condominium closings were made in cash in February compared to 43.9% of single family home sales.
Miami’s percentage of all cash sales is more than double the national average. About 26 percent of all national housing transactions were in cash in February 2015, according to the National Association of Realtors. Since 82% of foreign buyers in Florida purchase properties all cash, this continues to reflect Miami’s ability to attract international buyers.
‘Miami’s location and proximity to the Caribbean and Latin America have always attracted foreign buyers. Miami’s home prices are still very affordable when they are compared with other major cities such as Los Angeles and New York and even in comparison to cities with less attractive lifestyles and amenities,’ said Carlos Gutierrez, the association’s 2015 residential president-elect.
While traditional sales remain strong, distressed property transactions declined in Miami-Dade in February 2015 due to fewer short sales. In February only 35% of all closed residential sales in Miami were distressed, including REO (bank-owned properties) and short sales, compared to 36% in February 2014.
Short sales and REOs accounted for 7.2% and 27.8% respectively of total Miami sales in February 2015. Sales of REOs increased 21.7% year on year while that of short sales declined 33.9%.
Nationally, distressed sales were 11% of sales in February, unchanged for the third consecutive month and down from 16% a year ago.
The report also shows that after three years of record sales activity that resulted in an inventory shortage, seller confidence continues to result in more properties being listed in Miami.
Active listings at the end of February increased 9% but are about 60% below 2008 levels when sales bottomed. Inventory of single family homes increased 3.5% and condominium inventory increased 12.1%.
At the current sales pace, there is a 5.5 month supply of single family homes, a negligible decrease of 1.8% from 5.6 months in February 2014. There is an 8.9 month supply of condominium inventory, up from 7.5 months in February 2014, an increase of 19.1%. A balanced market between buyers and sellers offers between six and nine months supply of inventory.
New listings of single family homes decreased 1.3% and new condominium listings increased 0.8%.