Property price and sales growth in Miami being driven by strong demand
Strong demand for existing properties in Miami fuelled sales and price growth in September despite strong new construction sales, according to the latest report from the Miami Association of Realtors.
Single family home prices, which again increased in September, remain at affordable 2004 levels despite 34 months of consistent year on year increases, the data shows.
Condo prices also increased in September, marking 39 months of growth in the last 40 months. Condo prices declined in August for the first time in more than three years but rebounded in September.
The median sale price for single family homes increased 11.1% to $250,000 from $225,000 in September 2013. But the average sale price for single family homes decreased 0.4% from $372,191 in September 2013 to $370,880 last month.
Compared to September 2013, the median sale price for condominiums increased by 7.3% to $195,000 from $181,749 a year prior while the average sale price increased 12.5% to $355,156 from $315,615 in September 2013.
‘Strong demand for Miami real estate is fuelling healthy market activity for both single family homes and condominiums,’ said Liza Mendez, chairman of the association’s board.
‘New construction condos are also selling rapidly, reflecting all-around robust market performance fuelled by both domestic and international buyers,’ she added.
Overall Miami properties continue to sell at a rapid pace and at nearly asking price, reflecting strong demand. The median number of days on the market for single family homes sold in September was just 46 days, an increase of 12.2% from September 2013.
The median number of days on the market for condominiums sold in September was 59 days, an increase of 28.3% compared to the same period in 2013.
‘While greater supply is creating more opportunities for buyers, particularly for condominiums, lack of financing for condominiums and new construction sales are impacting existing sales,,’ said Francisco Angulo, residential president of the association.
‘The Miami real estate market remains very competitive depending on neighbourhood, price point and property type,’ he added.
The data also shows that cash sales in Miami continue to decline as more financing becomes available. Still, access to mortgage loans for condominium buyers remains limited, impeding further market strengthening.
In Miami-Dade County some 55.8% of total closed sales in September were all cash transactions, compared to 60.5% in September 2013. However, cash sales in Miami are still more than double the national figure of 24%.
All cash sales accounted for 40.3% of single family homes and 68.4% of condominium closings, compared to a year earlier when cash sales were 47.8% and 71% respectively.
Since nearly 90% of foreign buyers in Florida purchase properties all cash, this continues to reflect the much stronger presence of international buyers in the Miami real estate market.
While traditional sales continue to increase, distressed property transactions in September again declined in Miami-Dade due to fewer short sales. In September only 34.5% of all closed residential sales were distressed, including REOs (bank-owned properties) and short sales, compared to 37.6% in September 2013.
Short sales and REOs accounted for 8.8% and 25.8% respectively of total Miami sales in September. Sales of REOs increased 24.6% while that of short sales declined by 41.5%.
After three years of record sales activity that resulted in an inventory shortage, seller confidence continues to result in more properties being listed for sale in Miami.
Active listings at the end of September increased 23.5% but remain 60% below levels from 2008 when sales bottomed. Inventory of single family homes increased 19.7% and for condominiums it was up 24.1% year on year.
At the current sales pace, there is a 5.7 month supply of single family homes, an increase of 16.2% from September 2013, and an 8.1 month supply of condominiums, up 29.1% since September 2013. A balanced market between buyers and sellers offers between six and nine months supply of inventory.
New listings of single family homes increased 2.1% year on year and new condominium listings increased 4%.
At the end of the September, total housing inventory nationally declined 1.3% to 2.3 million existing homes available for sale compared to the previous month, which represents a 5.3 month supply at the current sales pace.