International buyers continue to boost the real estate market in Miami
Home prices in Miami, one of the most popular markets for overseas buyers in the United States have increased for 23 months in a row year on year.
The latest figures from the Miami Association of Realtors show that last month the median sales price for a Miami home was $220,000, a significant increase of 18.9% when compared to $185,000 during the same period last year.
Moreover, median condo prices also showed double digit appreciation. The median sales price for a Miami condo was $170,000, an increase of 17.2% from the year ago median price of $145,000.
‘The 23 consecutive months of appreciation of Miami home and condo prices is a remarkable sign of the vitality and strength of South Florida’s real estate market,’ said Natascha Tello, chairman of the board of the Miami Association of Realtors.
‘Rising home and condo values is a reflection of increased demand from international buyers from around the world, creating a great opportunity for sellers,’ she added.
Average sales prices were also marked by double digit growth. The average sales price of a Miami single family home in October was $421,546, a 29.9% increase compared to $324,611 at the same time last year. Similarly, average Miami condo prices increased by 11.8% to $296,568 relative to the prior year where the average price was $265,225.
Overall, home and condo sales experienced a modest single digit decline in October compared to last year’s figures, but remained strong relative to historical averages and performance.
While traditional sales showed strong gains, short sales greatly declined due primarily to the government shutdown delaying transactions requiring tax return verifications. Delays in FHA funding and other government related factors also contributed to fewer closings in October.
Last month, 1,060 homes were sold in Miami. This represented a modest decrease of 6.5% compared to 1,134 in October 2012. However, the figure was similar to September’s sales when 1,108, 48 fewer, homes were sold.
Condo sales were also strong in October. While the 1,416 condos sold in October represented a 1.2% decrease compared to year-ago figures, they were 4.7% greater than September’s condo sales figures of 1,352.
The market share and number of traditional sales continued to significantly grow in October compared to the year ago figures. Of the 1,060 homes sold last month 60.5% were traditional sales. Meanwhile, REO and short sales accounted for 20.8% and 18.8% of last month’s sales, respectively.
This is a significant increase in the number of traditional sales compared to October 2012 figures where they accounted for 49.8% of sales and REO and short sales were 23.1% and 27%, respectively, of total sales for that month. Thus, traditional sales have experienced a significant double digit growth of 13.5% relative to year ago figures. REO and short sales declined by 16% and 35.2%, respectively.
Condo sales saw similar increases last month. Of the 1,416 condo sales in Miami during October, 62.8% were traditional sales, an increase of nearly 8% compared to the same period during 2012 when traditional condo sales were 54.9% of all Miami condo transactions.
Meanwhile, REO and short sales accounted for 24.1% and 13.1%, respectively, of total sales last month. The October decline of the latter represented a 47.3% decrease in condo short sales relative to the same period in 2012, when the 353 short sales accounted for 24.6% of all condo sales.
‘The double digit growth in traditional real estate sales is a sign of continued strength in Miami’s real estate market,’ said Fernando Martinez, residential president of the Miami Association of Realtors.
‘The significant growth in cash sales shows that Miami is the destination of choice for international buyers, who continue to play a major role in the local market,’ he added.
The data also shows that at the current sales pace, there is a 5.3 month supply of single family homes and 6.6 months of supply of condominiums in Miami Dade, representing an increase of 17.8% and 24.5%, respectively, compared to year ago levels.
The median number of days on the market for single family homes sold in October 2013 was just 40 days, one less day than in September 2013, and a slight increase from 38 days in October 2012. In addition, the average sales price was 96.3% of the listed price last month, up from 95% the prior year and 95.9 percent in September 2013. Combined with the fast sales, this is a sign that homes are being priced right.
Condominiums also sold at a rapid pace and close to their asking price in October 2013. The median number of days on the market for a condo was just 44 days, down 4.3% from September and slightly more than 43 during October 2012, a modest increase of just 2.3%.
Cash home and condo sales continue to be a major driving force behind Miami’s real estate boom, a sign of continued interest from international buyers, most of whom pay cash. Of the 1,060 homes sold last month, the 518 cash transactions accounted for 48.9% of all home sales, an increase of 3.2% relative to October 2012 when home cash sales were 45.7% of transactions.
The great majority of condo sales continue to be all cash transactions. Of the 1,416 condos sold last month, 71.2% of them were paid in cash. Meanwhile, during the same period in 2012, condo cash transactions accounted for 76.6% of sales.
By comparison all cash sales nationally accounted for 31% of transactions in October, down from 33% the previous month and up from 28% in October 2012.