May 2017 was a record month for single-family homes in Miami, with demand driven by job growth. Condo sales are also up and near record levels:
Miami’s single-family home market registered its best May in history as total home sales, median prices, dollar volume, traditional sales and luxury transactions surged, according to a new report by the MIAMI Association of REALTORS® (MIAMI) and the Multiple Listing Service (MLS) system.
Best May in History
May saw 1,344 Miami single-family home sales, the most in any May in Miami real estate history and a 9.9 percent jump from the 1,223 homes sold a year ago. Miami existing condo sales (up 5.7 percent), total residential sales (up 7.7 percent), total dollar volume (up 14.7 percent) and single-family luxury transactions (up 23.5 percent) also increased. Sales for single-family luxury ($1 million or above) have risen for three consecutive months.
“Pent-up demand is fueling a historic Miami home buying season,” said Coral Gables Realtor Christopher Zoller, the 2017 MIAMI chairman of the board. “Two months after posting its most March single-family home sales ever, Miami-Dade County broke another record for the most May sales. Local job growth and impending interest rate hikes are fueling purchases.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.01 percent in May. The average commitment rate for all of 2016 was 3.65 percent.
Total Home Sales Increase
Total existing Miami-Dade County residential sales — which posted a record year in 2013 and near record years in 2014 and 2015 — increased 7.7 percent year-over-year from 2,532 to 2,728.
Sales for existing condominiums, which are competing with a robust new construction market, increased 5.7 percent year-over-year from 1,309 to 1,384.
The existing condo market could see future growth, according to new pending sales data. The number of existing Miami condo properties that went under contract in May rose 6.8 percent year-over-year. New pending sales for single-family homes also increased (up 5.4 percent in May).
Lack of access to mortgage loans is inhibiting 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.
New Record for Single-Family May Home Sales
The 1,344 Miami-Dade County single-family homes sold in May 2017 surpassed the county’s previous May record of 1,276 transactions in May 2015.
The rise in Miami single-family home sales is being fueled by a surge in mid-market and luxury transactions. Miami single-family mid-market home sales, or transactions for properties listed between $200,000 and $600,000, jumped 27.9 percent in May, from 756 to 967 sales. Mid-market home sales comprise 71.9 percent of all single-family home sales.
Luxury single-family sales ($1 million and above) jumped 23.5 percent in May 2017.
Miami single-family traditional sales, or non-distressed transactions, rose 21.4 percent. This growth in traditional sales, from 980 to 1,190 transactions, shows the health and strength of the Miami market.
Total sales volume for all properties accounted for $1.17 billion last month. These sales do not include Miami’s multi-billion dollar new construction condo market.
Median Prices Rise for All Properties
Miami-Dade County single-family home prices jumped 10.7 percent in May 2017, increasing from $293,500 to $325,000. Miami single-family home prices have now risen for 66 consecutive months, a streak spanning five and half years. Existing condo prices increased 4.8 percent, from $214,750 to $225,000. Condo prices have increased in 70 of the last 72 months.
Despite the rise in prices, Miami real estate remains a major 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.
Miami Distressed Sales Continue to Drop
Total Miami distressed sales declined 41.8 percent year-over-year, from 471 to 274 last month. Only 10 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 18.6 percent in May 2016. In 2009, distressed sales comprised 70 percent of Miami sales.
Short sales and REOs accounted for 2.6 and 7.4 percent, respectively, of total Miami sales in May 2017. Short sale transactions dropped 13.4 percent year-over-year while REOs fell 47.8 percent.
Nationally, distressed sales accounted for 5 percent of sales in May, down from 6 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 48 days, a 2.0 percent decrease from 49 days last year. The median number of days between the listing date and closing date for single-family properties stayed the same at 98 days.
For condos, the median time to contract increased 17.2 percent to 75 days. The median number of days between the listing date and closing date increased 7.5 percent to 115 days.
The median percent of original list price received for single-family homes increased 0.1 percent to 95.5 percent. The median percent of original list price received for existing condominiums decreased 0.6 percent to 93.7 percent.
National and State Statistics
Nationally, total existing-home sales rose 1.1 percent to a seasonally adjusted annual rate of 5.62 million in May from a downwardly revised 5.56 million in April.
Statewide closed sales of existing single-family homes totaled 27,850 last month, up 7.6 percent compared to May 2016, according to Florida Realtors. Statewide closed condo sales totaled 11,538 last month, up 8 percent compared to May 2016.
The national median existing-home price for all housing types was $252,800, up 5.8 percent from May 2016 ($238,900) and marks the 63rd straight month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $239,000, up 7.7 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties was $178,000, up 8.1 percent over the year-ago figure. May was the 66th consecutive month that statewide median prices for both sectors rose.
Miami’s Cash Buyers Represent Almost Double the National Figure
Miami cash transactions comprised 39.4 percent of May total closed sales, compared to 47.2 percent last year. Miami cash transactions are almost double the national figure (22 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.
Condominiums comprise a large portion of Miami’s cash purchases as 53.8 percent of condo closings were made in cash in May compared to 24.6 percent of single-family home sales.
Seller’s Market for Single-Family Homes, Supply Declines in May
Inventory of single-family homes decreased 5.0 percent in May from 6,522 active listings last year to 6,193 last month. Condominium inventory increased 8.8 percent to 15,325 from 14,081 listings during the same period in 2016.
Monthly supply of inventory for single-family homes decreased 3.4 percent from 5.8 months to 5.6. The 5.6-month supply indicates a seller’s market. Existing condominiums have a 13.8-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 May increased 4.4 percent year-over-year, from 20,603 to 21,518, Active listings remain about 60 percent below 2008 levels when sales bottomed. New listings of Miami single-family homes increased 3.2 percent, from 1,829 to 1,888. New listings of condominiums increased 4.2 percent, from 2,332 to 2,430.
Nationally, total housing inventory at the end of May rose 2.1 percent to 1.96 million existing homes available for sale, but is still 8.4 percent lower than a year ago (2.14 million) and has fallen year-over-year for 24 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.7 months a year ago.