“Low mortgage rates and a new tax law continue fueling Miami real estate"
MIAMI (PRWEB) January 22, 2020
Miami-Dade County total home sales surged double digits in December 2019 thanks to a robust increase in mid-market and $1-million-and-up transactions, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Pending sales, which are indicators of future closed sales and reflect demand, increased in December and have now risen in nine of the last 11 months. In another indicator of strong local demand, months supply of inventory is down since July 2019 for single-family and since March 2019 for condos.
“Low mortgage rates and a new tax law continue fueling Miami real estate,” MIAMI Chairman of the Board Jorge L. Guerra Jr. said. “The new Tax Cuts and Jobs Act reduced certain deductions that homeowners in high-tax states could claim, which is encouraging more residents of states like New York to move to states with no state income tax like Florida.”
Miami Total Home Sales Jump 16.4%
Miami total home sales increased 16.4%, from 2,083 to 2,424. Miami single-family home sales increased 16%, from 1,012 to 1,174. Miami existing condo transactions jumped 16.7%, from 1,071 to 1,250.
A rise in mid-market and $1-million-and-up transactions played an integral role in last month’s increases.
Sales for Miami single-family homes priced between $400K to $600K increased 41.2% in December 2019 to 298 transactions. Sales for Miami condos priced between $250,000 to $300,000 increased 33.8% to 190 transactions.
In the luxury market ($1-million-and-up), Miami single-family homes jumped 35.9% to 106 transactions. Luxury Miami existing condos surged 47.5% to 87 transactions in December 2019.
Dollar Volume Increases, Inventory Decreases
Single-family home dollar volume increased 30.4%, from $539.8 million to $703.8 million. Condo dollar volume rose 30.6%, from $389.4 million to $508.5 million.
Inventory of active listings has decreased the last four months for condos and the last five months for single-family. Months supply of inventory is down since July 2019 for single-family and since March 2019 for condos, reflecting strong demand.
With consumer confidence rising, unemployment low, job creation high and increased migration to Florida, Miami real estate should enjoy steady growth.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 3.72% in December, up from 3.70% in November. The average commitment rate across all of 2019 was 3.94%.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
A new condo approval process could increase sales in the future. The new guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR has championed, are expected to generate increased homeownership opportunities.
Eight Consecutive Years of Price Appreciation in Miami
Miami-Dade County single-family home prices increased 7% in December 2019, increasing from $355,000 to $380,000. Miami single-family home prices have risen for 97 consecutive months, a streak of 8-plus years. Existing condo prices increased 4.3%, from $235,000 to $245,000. Condo prices have increased or stayed even in 99 of the last 103 months.
Despite the price increase, Miami, where the median price is still comparable to 2006 figures, remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 93 square meters of prime property, according to Knight Frank’s 2019 The Wealth Report. Monaco (16 square meters), Hong Kong (22), New York (31), Los Angeles (36) and others offer significantly less prime land for $1 million.
Miami Distressed Sales Stay Low, Reflecting Healthy Market
Only 5.6% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 6.1% in December 2019. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales increased 5.5%, from 128 to 135.
Short sales and REOs accounted for 1.2% and 4.3%, respectively, of total Miami sales in December 2019. Short sale transactions increased 11.1% year-over-year while REOs decreased 3.9%.
Nationally, distressed sales represented 2% of sales in December, unchanged from both November 2019 and December 2018.
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 50 days, a 9.1% decrease from 55 days last year. The median number of days between the listing date and closing date for single-family homes was 92 days, a 6.1% decrease from 98 days.
The median time to contract for condos 75 days, a 16.7% decrease from 70 days last year. The median number of days between the listing date and closing date for condos was 110 days, a 3.5% decrease from 114 days.
The median percent of original list price received for single-family homes was 95.6%. The median percent of original list price received for existing condominiums was 93.7%.
National and State Statistics
Nationally, total existing-home sales transactions increased 3.6% from November to a seasonally-adjusted annual rate of 5.54 million in December. Additionally, overall sales took a significant bounce, up 10.8% from a year ago (5.00 million in December 2019).
Statewide closed sales of existing single-family homes totaled 25,557 last month, up 23.8% from December 2018, according to Florida Realtors. Florida’s condo-townhouse market totaled 9,605, up 17.7% from the level a year ago. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
The national median existing-home price for all housing types in in December was $274,500, up 7.8% from December 2018 ($254,700), as prices rose in every region. November’s price increase marks 94 straight months of year-over-year gains.
Statewide median sales prices for both single-family homes and condo-townhouse properties in December rose year-over-year for 96 months in a row. The statewide median sales price for single-family existing homes was $270,000, up 5.9% from the previous year. Last month’s statewide median price for condo-townhouse units was $200,000, up 8.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Miami’s Cash Buyers Represent Almost Double the National Figure
Miami cash transactions comprised 33.9% of December 2019 total closed sales, compared to 34.8% last year. Miami cash transactions are almost double the national figure (20%).
Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami’s cash purchases as 47.2% of condo closings were made in cash in November compared to 19.9% of single-family home sales.
Seller’s Market for Single-Family Homes, Buyer’s Market for Condos
Inventory of single-family homes decreased 10% in December from 6,877 active listings last year to 6,190 last month. Condominium inventory decreased 7.6% to 14,662 from 15,871 listings during the same period in 2018.
Months supply of inventory for single-family homes decreased 12.5% to 5.6 months, which indicates a seller’s market. Inventory for existing condominiums decreased 8.8% to 12.5 months, which indicates a buyer’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of December decreased 8.3% year-over-year, from 22,748 to 20,852. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Miami single-family homes decreased 3.1% to 1,188 from 1,226. New listings of condominiums decreased 10.4%, from 1,771 to 1,886.
Nationally, total housing inventory at the end of December totaled 1.40 million units, down 14.6% from November and 8.5% from one year ago (1.53 million). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from the 3.7-month figure recorded in both November and December 2018. Unsold inventory totals have dropped for seven consecutive months from year-ago levels, taking a toll on home sales.
To access December 2019 Miami-Dade Statistical Reports, visit http://www.miamirealtors.com/news/south-florida-market-intelligence
Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.
About the MIAMI Association of Realtors
The MIAMI Association of Realtors was chartered by the National Association of Realtors in 1920 and is celebrating 100 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward-MIAMI Association of Realtors, the Jupiter Tequesta Hobe Sound (JTHS-MIAMI) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents 52,000 total real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S. and has official partnerships with 222 international organizations worldwide. MIAMI’s official website is http://www.MiamiRealtors.com