Residential real estate market in Miami continues to strengthen
The Miami real estate market continues to strengthen as it nears a full year of significant price increases fuelled by strong sales and an inventory shortage, according to the latest report from the Miami Association of Realtors.
Despite very limited inventory, total residential sales in Miami-Dade County surged 24.2% in October compared to a year earlier. The sales of existing condominiums in Miami-Dade increased 13.1% while sales of single family homes increased 41.9%.
‘Intense demand for Miami properties continues to fuel robust price appreciation. Demand from investors, foreign and vacation buyers as well as US and local residents remains very strong,’ said Martha Pomares, chairman of the board of the Miami Association of Realtors.
‘The world is focused on Miami where population growth, global business expansion, and record tourism are just a few of the factors attracting attention on many fronts and will continue to fuel demand long into the future,’ she added.
Statewide sales of existing single family homes increased by 25.3% compared to a year ago but condominium sales were down 16.4% from October 2011. Nationally, sales of existing single family homes, town homes, condominiums, and co-ops rose 2.1% in October and were 10.9% higher than they were in October 2011, according the National Association of Realtors.
Miami home prices rose again in October, marking 11 consecutive months of appreciation for both single family homes and condominiums. The median sales price of Miami-Dade condominiums, which has increased each of the last 16 months, rose 24.2% to $146,000 compared to a year earlier. The median sales price of single family homes rose 5.8% to $185,000.
In October the average sales price for condominiums in Miami-Dade County increased 16.4% to $265,783. The average sales price for single family homes decreased 14% to $324,253.
Statewide median sales prices in September increased 9% to $145,000 for single family homes and 20.2% to $107,000 for condominiums, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing.
The national median existing home price for all housing types was $178,600 in October, an 11.1% increase from October 2011, according to NAR.
‘Miami’s strong rental market clearly reflects the demand for local housing that is attracting both US and foreign investors. Many local residents who defaulted on loans during the market downturn are not able to purchase homes again, thus generating demand for rental properties that should persist for a few years and should continue to boost market performance,’ said Miami Association of Realtors residential president Patricia Delinois.
Over the last year, the inventory of residential listings in Miami-Dade County has dropped 22.2% but compared to the previous month, the total inventory of homes increased 1.5%. Currently, there are 4.2 months of supply in Miami-Dade.
Total housing inventory nationally decreased 1.4% at the end of October and was 21.9% below year ago levels, representing a 5.4 month supply at the current sales pace.
Properties are selling much more rapidly in the current market than they did a year ago. The current median days on the market is only 39 for single family homes and 43 for condominiums, compared with historic averages of 90 to 120 days on the market.
These are respectively 35% and 15.7% decreases year on year. Nationally, the median time on the market was 71 days.
Strong demand for bank owned (REO) properties and improved processing of short sales continues to yield absorption of distressed listings and to contribute to price appreciation. In October, 47.5% of all closed residential sales in Miami-Dade County were distressed, including REOs and short sales, compared to 57% in October 2011 and 47.4% the previous month. Nationally, distressed homes accounted for 24% of October sales, unchanged from September.
Cash sales continue to reflect a strong international presence in the market. In Miami-Dade County 63.7% of total closed sales in October were all cash sales, compared to 64% in October 2011 and 62.4% the previous month. Cash sales accounted for 46% of single family and 77.6% of condominium closings.
Nearly 90% of foreign buyers in Florida purchase properties all cash. This reflects the much stronger presence of international buyers in the Miami real estate market. By comparison all cash sales nationally accounted for 29% of transactions in October, up from 28% the previous month and they were 29% in October 2011.