Miami Condo Sales Uptick 6.5 Percent in August Over Last Year

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According to the Miami Association of Realtors, Miami-Dade County residential sales rose nearly three percent year-over-year in August 2015, while median sales prices for single-family and condominium properties continued their upward trend.

Total existing Miami-Dade County residential sales, including single-family and condo markets, rose 2.9 percent to 2,479 last month compared to 2,409 a year ago. Single-family home transactions decreased a negligible 1.0 percent year-over-year in August 2015, from 1,157 to 1,145. Existing condominium sales increased 6.5 percent, from 1,252 to 1,334.

"After several record-breaking months of sales, Miami real estate continued its positive momentum in August," said Christopher Zoller, the 2015 Residential President of the Miami Association of Realtors. "Single-family transactions, which only declined one percent in August, remain on pace to finish as one of the top sales years on record in Miami history. And despite continued competition from South Florida's strong pre-construction market, existing condos registered 6.5 percent sales growth year-over-year."

Today's mortgage rates, which remain at historically-low levels, continue to encourage more home-buying activity. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.91 percent in August 2015, down from the 4.12 percent average recorded during the same month a year earlier.

Mortgage Loans for Existing Condo Buyers

Despite the rise in sales of existing Miami-Dade County condominiums in August, access to mortgage loans for existing condominium buyers remains limited.

The lack of Federal Housing Administration loans for a large number of existing Miami condominium buildings is preventing further market strengthening. Of the 8,523 condominium buildings in Miami-Dade and Broward Counties, only 29 are approved for FHA loans, according to statistics released earlier this year from the Florida Department of Business and Professional Regulation and FHA. Just .0034 percent of local condo buildings are approved for FHA loans. The U.S. average is 30 percent.

"The Miami Association of Realtors continues to work on ways and programs to increase the number of local condo buildings that are approved for FHA loans," said Danielle Blake, MIAMI's Senior Vice President of Government Affairs & Housing.

Like other places around the nation, the South Florida region has benefited from the return of portfolio lending. With the rise in national and local median prices, many lenders have opted to hold the loans they originate rather than selling them.

Median Prices Register Growth

Single-family home prices, which again increased in August, remain at 2004 levels despite four years of consistent year-over-year increases. Condo prices also increased in August 2015, marking growth in 50 of the last 51 months. The median sales price for single-family homes rose 4.2 percent, up to $260,500 in August 2015 from $250,000 in August 2014. The median sales price for condominiums increased 12.1 percent in August to $204,000 from $182,000 a year ago.

Despite the increase in median prices, Miami's residential properties are still a bargain in the world market. A 120-square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average, according to the National Association of Realtors 2015 Profile of Home Buying Activity of International Clients. The price for the same condo in London ($960,840), Hong Kong ($776,280), and New York ($1.6 million) were at least five times higher, according to NAR.

Miami Real Estate Sells Close to List Price

Miami properties continue to sell close to asking price, reflecting strong consumer demand. The median number of days on the market for Miami single-family homes dropped 19.1 percent to 38 days in August 2015 from 47 days in August 2014. The average percent of original list price received was 96.1 percent, an increase of 0.7 percent from a year earlier.

The median number of days on the market for condominiums sold in August 2015 was 64 days, a 20.8 percent increase from 53 days in August 2014. The average percent of original list price received was 93.2 percent, a 1.6 percent year-over-year decrease.

National and State statistics

Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops fell 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August from a slight downward revision of 5.58 million in July, according to the National Association of Realtors (NAR). National sales, however, have risen year-over-year for 11 consecutive months and are 6.2 percent above a year ago (5.00 million).

Statewide, closed sales of existing single-family homes totaled 23,605 last month, up 8.6 percent over August 2014, according to Florida Realtors. Florida's condominium sales jumped to a total of 9,262 transactions, up 4.1 percent compared to August 2014.

The national median existing-home price for all housing types in August was $228,700, which is 4.7 percent above August 2014 ($218,400), according to NAR. August's price increase marks the 42nd consecutive month of year-over-year gains.

The statewide median sales price for single-family existing homes last month was $199,900, up 11.1 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties was $150,000, up 10.3 percent over the year-ago figure.

Miami's Cash Buyers Represent More than Twice the National Average

Cash deals represented 49.6 percent of Miami's total closed sales in August 2015. That is more than double the national average as just 22 percent of all U.S. housing sales were made in cash in August, according to NAR. Cash transactions represented 54.4 percent of total Miami deals in August 2014. 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 63.1 percent of condo closings were made in cash in August compared to 33.8 percent of single-family home sales.

Distressed Property Transactions Decline in Miami

Distressed property transactions declined in Miami. Only 25.7 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 34.3 percent in August 2014.

Short sales and REOs accounted for 5.6 percent and 20.1 percent, respectively, of total Miami sales in August. Short sale transactions decreased 39.6 percent year-over-year while REOs decreased 16.4 percent.

Nationally, distressed sales were 7 percent of sales in August, down from 8 percent a year ago.

Seller's Market for Single-Family Homes

Active listings at the end of August increased 2.6 percent year-over-year, from 17,244 to 17,699. Active listings remain about 60 percent below 2008 levels when sales bottomed.

August data details a seller's market for Miami single-family homes as active listings continued to decrease in the sector. The supply of existing condominiums, meanwhile, reflects a balanced market. Inventory of single-family homes decreased 6.4 percent from 6,284 active listings last year to 5,880 last month. Condominium inventory increased 7.8 percent to 11,819 from 10,960 listings during the same period in 2014.

At the current sales pace, there is a 5.0-month supply of Miami single-family homes, a decrease of 12.8 percent from 5.7 months in August 2014. There is an 8.7-month supply of condominium inventory, up from 8.0 months in August 2014, an increase of 8.5 percent. A balanced market between buyers and sellers offers between six and nine months' supply of inventory.

New listings of Miami single-family homes decreased 5.2 percent from 2,140 in August of last year to 2,028 last month. New listings of condominiums decreased 3.3 percent to 2,699 last month, compared to 2,791 during the same time period in 2014.

Nationally, total housing inventory at the end of August rose 1.3 percent to 2.29 million existing homes available for sale, but is 1.7 percent lower than a year ago (2.33 million). Unsold inventory is at a 5.2-month supply at the current sales pace, up from 4.9 months in July.

New Construction

Strong sales in the preconstruction condominium Miami market east of Interstate 95 continue to reflect significant demand for new properties, according to the latest New Construction Market Status Report released from the preconstruction condo projects website Cranespotters.com and the Miami Association of Realtors.

Twenty-six towers with 570 floors and 3,098 units have been completed in Miami-Dade County east of I-95 in the four years since 2011, according to the Sept. 14 report. There are 71 towers with 1,515 floors and 8,900 units under construction in Miami east of I-95. About 70 towers with 1,613 floors and 10,771 units are planned, but have not begun development. There are also 66 towers with 1,642 floors and 9,626 units that have been proposed in Miami east of I-95.

As of May 2015, developers in Miami-Dade County have announced 215 towers with 5,160 floors and 31,530 units since 2011. Of the above projects:

• 103 projects with 119 towers comprising 17,199 units are selling.
• 71 percent of units have been sold.
• The mean minimum price per square foot of these units is $949, compared to $952 last month.