Miami Condo Prices Dip, First Time in 38 Months

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Like the start of the 'Fall season', there seems to be change in the air for Miami's real estate market these days.

According to the Miami Association of Realtors, demand for new construction properties continued to impact the Miami existing real estate market in August as reflected by sales activity, prices, and rising inventory.

Sale prices again increased for existing single-family homes in August, while the median sale price for condominiums dipped slightly. Prices remain at affordable 2004 levels despite 33 months of consistent increases for single-family homes.  Condo prices had increased for 38 consecutive months and began increasing long before that of single-family homes. Condo prices declined in August for the first time in more than three years.

The median sale price for single-family homes increased 6.4 percent, up to $250,000 from $235,000 in August 2013. The average sale price for single-family homes increased 24.7 percent from $364,960 in August 2013 to $455,108 last month.

Compared to August 2013, the median sale price for condominiums decreased by 4.2 percent to $182,000 from $190,000 a year prior.  The average sale price for condominiums decreased -6.9 percent to $346,847 from $322,743 in August 2013.

"The Miami real estate market continues to normalize as the new construction sector gains momentum and generates strong demand for additional new supply, impacting the existing condominium market," said 2014 Chairman of the Board of the Miami Association of Realtors Liza Mendez. "Despite declines in sales and condo prices, the performance of the Miami residential market continues to be comparable to what it was in during periods of record sales activity."

Sales Remain Strong despite Slight Year-Over-Year Declines

Single-family home sales in Miami-Dade County decreased 4.4 percent relative to August 2013, from 1,210 to 1,157. Compared to August 2013, condominium sales declined 21.4 percent from 1,592 the previous year to 1,252 last month. Combined, residential real estate sales decreased 14 percent to 2,802 compared to 2,409 in August of last year.

Miami Real Estate Selling Fast, Close to List Price

Miami real estate continues 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 August was just 47 days, an increase of 34.3 percent from August 2013. The average percent of original list price received was 95.4 percent, down a negligible 0.8 percent from a year earlier.

The median number of days on the market for condominiums sold in August was 53 days, an increase of 15.2 percent compared to the same period in 2013. The average sales price was 94.7 percent of the asking price, a decrease of 2.6 percent.

"Although the Miami market continues to normalize creating more balance between buyers and sellers, some price points, particularly for single-family homes, still reflect strong demand coupled with limited supply," said 2014 Miami Association of Realtors Residential President Francisco Angulo. "In certain market areas and price points, homes for sale are still generating multiple offers, sales above asking price, and competition between prospective buyers."

National and State Figures

Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops slipped 1.8 percent from July and remain 5.3 percent below what they were in August 2013, according to the National Association of Realtors (NAR).  Statewide closed sales of existing single-family homes totaled 221,594 in August, up 4.2 percent compared to the year-ago figure, according to Florida Realtors. Statewide sales of condominiums totaled 8,848, down 8.8 percent from August 2013.

The national median existing-home price for all housing types was $219,800 in August, a 4.8 percent increase from August 2013, according to NAR.  The statewide median sale price for single-family existing homes last month was $181,000, up 3.4 percent from the previous year, while that of townhouse-condo properties was $135,000, up 3.8 percent over the previous year.

Cash Sales Decline

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, 54.4 percent of total closed sales in June were all-cash transactions, compared to 57.3 percent in August 2013. Cash sales in Miami are still significantly higher - by 31 percent - compared to the national percentage of 23 percent. All-cash sales accounted for 41 percent of single-family home and 66.8 percent of condominium closings, compared to a year earlier when cash sales were 43.8 percent of single-family home sales and 67.6 percent of condominium sales.

Since nearly 90 percent 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.

Short Sales Continue to Decrease

While traditional sales continue to increase, distressed property transactions in August again declined in Miami-Dade due to fewer short sales.  In August, only 33.1 percent of all closed residential sales in Miami-Dade County were distressed, including REOs (bank-owned properties) and short sales, compared to 36.9 percent in August 2013.

Short sales and REOs accounted for 9.5 and 24.8 percent, respectively, of total Miami sales in August.  Sales of REOs increased 5.7 percent while that of short sales declined by 48 percent.

Nationally, distressed homes accounted for 8.0 percent of August sales compared to 12 percent in August 2013.

Active Inventory Rises

After three years of record sales activity that resulted in an inventory shortage, seller confidence is resulting in more properties being listed for sale in Miami.

Active listings at the end of August increased 25.3 percent, from 13,763 in 2013 to 17,244 last month but remain 60 percent below 2008, when sales bottomed. Inventory of single-family homes increased 20.4 percent from 5,220 in August 2013 to 6,281 last month. Condominium inventory increased 28.3 percent to 10,960 from 8,543 active listings during the same period in 2013. At the current sales pace, there is still a 5.7-month supply of single-family homes, an increase of 15.3 percent from 4.9 months in August 2013, and an 8-month supply of condominiums, up from 6.0 months in August 2013, an increase of 33.6 percent. A balanced market between buyers and sellers offers between six and nine months' supply of inventory.

New listings of single-family homes increased 6.5 percent, up to 2,140 in August 2014 from 2,009 during the same period in 2013. New condominium listings increased 2.7 percent from 2,717 in august 2013 to 2,791 last month.

At the end of the August, total housing inventory nationally declined 1.7 percent to 2.31 million existing homes available for sale compared to the previous month, which represents a 5.5-month supply at the current sales pace.  Unsold inventory nationally is 4.5 percent higher than a year ago.

New Construction Market Update

Strong sales in the coastal new construction condominium Miami market (east of I-95) reflect significant demand for new properties, according to the latest New Construction Market Status Report released today by Cranespotters.com.

Declines in existing sales can be attributed to new construction supply becoming available over the last year.

Currently, there are 180 new construction towers that have been announced in Miami-Dade County east of I-95, of which 60 have not been approved, 59 are planned but have not begun development, 54 are under construction, and 7 were completed in 2014. Of the above projects in Miami-Dade:

• 77 projects with 91 towers comprising 14,140 units are currently selling

• Since 2011, 66 percent or 9,286 units have been sold, compared to 63 percent in July

• The mean price per square foot of these units is $844, compared to $825 last month

"South Florida's preconstruction condo market continues to grow with developers adding 24 new condo towers with more than 3,200 units to the market east of Interstate 95 in Miami-Dade, Broward and Palm Beach counties in the last month," said Peter Zalewski, founder of Cranespotters.com. "A key factor driving developers to propose new condo towers is the steady pace of preconstruction sales in South Florida. In the last month, buyers have purchased an estimated 439 preconstruction condo units in South Florida based on the latest CraneSpotters.com Developers Price Survey as of Sept. 5, 2014. To date, buyers have purchased more than 10,825 units in new condo towers in South Florida since 2011."