Residential Real Estate News
Greater Miami Condo Sales Spike 104 Percent Annually in July
Miami Enjoys 5 Consecutive Record Setting Sales Months This Summer
Miami Realtors are reporting this week that Miami-Dade County real estate posted its best July sales month in history as pent-up demand, more U.S. individuals and companies moving to South Florida, and record-low mortgage rates continue fueling transactions.
Miami-Dade County total home sales surged 57.7% year-over-year in July 2021, from 2,303 sales to 3,632. Miami single-family home transactions rose 15%, from 1,194 to 1,373. Miami existing condo sales increased 103.7%, from 1,109 to 2,259.
"A historic year for Miami real estate continues with the best-ever July sales month," MIAMI Chairman of the Board Jennifer Wollmann said. "The pandemic and the increase in remote work availability has accelerated the demand for Miami real estate. Tax-burdened Northeast and West Coast homebuyers continue fueling sales and now with global vaccinations rising and unstable global political situations, South Florida is seeing an increase in foreign buyers."
Miami real estate has now posted record sales months in each of the last five months (March, April, May, June, and July). June 2021 (with its 4,057 total transactions) remains the No. 1 overall sales month in Miami history. July 2021 (with its 3,632 sales) ranks as the fourth-best sales month overall since MIAMI began tracking stats in 1993.
Miami home sales are also significantly higher vs. July 2019. Miami total home sales are up 45.9% in July 2021 vs. July 2019, from 2,490 to 3,632. Miami single-family home sales (8.1% increase) and condo transactions (85.2% jump) are higher than July 2019.
Demand for Miami Condos Surges; Condo Sales Jump 103.7% Year-over-Year in July 2021
Unlike many other major cities that have low inventory, Miami's existing condo market has 4.9 months of condo supply. It's a balanced market, good for both buyers and sellers, but there is healthy inventory compared to the Miami single-family homes market (2.2 months of supply).
With so many U.S. companies and individuals relocating to our region over the last year, many of those relocating homebuyers are taking advantage of the condo inventory. International homebuyers, who have long preferred condos, have pent-up demand for Miami real estate and are also returning to the No. 1 market for foreign homebuyers.
Miami existing condo sales are up in all price ranges in July 2021, with major transaction increases in properties selling at $300K and above.
Lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply. More inventory is expected to come to the market later this year as potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
Miami Luxury Sales Jump as Northeast and West Coast Buyers Move to Mega Region
Miami single-family luxury ($1-million-and-up) transactions jumped 110.1% year-over-year to 271 sales in July 2021. Miami existing condo luxury ($1-million-and-up) sales increased 323.3% year-over-year to 254 transactions.
Comparing the July 2021 luxury stats to July 2019 also shows major gains. Miami single-family luxury sales surged 141.9% from July 2019 to July 2021. Miami condo luxury transactions jumped 247.9% from July 2019 to July 2021.
There are 4.3 months of supply in luxury single-family homes; 10.6 months of supply in luxury condos. Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
Low interest rates; a robust S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers are also coming here for the vaccine and purchasing property. Global buyers purchase in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures.
Miami single-family homes priced between $400K to $600K surged 40.6% year-over-year to 488 transactions in July 2021. Miami existing condo sales priced between $400K to $600K increased 273.3% to 377 transactions.
Single-Family Home Inventory Rises Month-over-Month as More Listings Arrive to the Market
Miami single-family homes inventory rose in July 2021 compared to June 2021 and new single-family listings significantly rose year-over-year, two indicators that more inventory is heading to the low-supply/high demand market.
The number of Miami single-family home active listings increased 3.6% in July 2021 compared to June 2021, from 2,853 to 2,957. For single-family homes, new listings increased 11.3% year-over-year, from 1,497 to 1,666.
Inventory of single-family homes decreased 32.9% year-over-year in July 2021 from 4,408 active listings last year to 2,957 last month. Condominium inventory decreased 41.3% year-over-year to 8,473 from 14,443 listings during the same period in 2020.
Months' supply of inventory for single-family homes decreased 48.8% to 2.2 months, which indicates a seller's market. Inventory for existing condominiums decreased 65.5% to 4.9 months, which indicates a seller's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Months' supply of inventory is down since July 2019 for single-family, reflecting strong demand.
Total active listings at the end of July 2021 decreased 39.4% year-over-year, from 18,851 to 11,430.
New listings of Miami single-family homes increased 11.3% to 1,666 from 1,497. New listings of condominiums increased 18%, from 2,209 to 2,607.
Nationally, total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June's supply and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020.
Miami Homeowners' Home Equity Continues Surging as Many Pay Lower Mortgage Payments
With interest rates still at record lows, many South Florida homeowners have refinanced their home loans. So not only are many homeowners paying lower mortgage payments today; they are doing so while their wealth (home equity) has significantly increased. Home equity can be tapped for renovations, college loans and more.
Miami-Dade County single-family median prices increased 25.6% year-over-year in July 2021, increasing from $410,000 to $515,000. Miami single-family median prices have risen for 116 consecutive months, a streak of 9.7 years. Existing condo median prices increased 30.8% year-over-year, from $260,000 to $340,000. Condo median prices have increased or stayed even in 118 of the last 122 months.
The greater share of Miami luxury sales in 2021 compared to a year ago is part of the reason for the large year-over-year increase in median prices.
Rising median prices is a trend nationwide as record-low mortgage rates and the increased availability of remote work and education has accelerated the demand for housing. Low inventory relative to high demand leads to prices rising.
Lower mortgage rates are making home purchases more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.87% in July, marginally down from 2.98% in June. The average commitment rate across all of 2020 was 3.11%. NAR Chief Economist Lawrence Yun expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021, the increased inventory should ease the growth of median prices.
Miami remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 85 square meters of prime property, according to Knight Frank's 2021 The Wealth Report. Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35) and others offer significantly less prime land for $1 million.
Miami Dollar Volume Totals $2.7 Billion, Showcasing Impact Housing Plays in Local Economy
While other industries struggled over the past year, housing lifted the economy nationally and locally. For every two homes sold in the U.S., one job is created. Miami dollar volume showcases the impact housing plays in the local economy.
Miami total dollar volume totaled $2.7 billion in July 2021. Single-family home dollar volume increased 67% year-over-year, from $810.4 million to $1.4 billion. Condo dollar volume increased 186.9% year-over-year, from $453.3 million to $1.3 billion.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Only 19 of the 1,929 condominium buildings in Miami-Dade, Broward and Palm Beach counties are approved for Federal Housing Administration loans as of Aug. 17, 2021, according to the U.S. Department of Housing and Urban Development.
A better condo approval process is expected to increase sales. The 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 have championed, are expected to generate increased homeownership opportunities.
Miami Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 1.3% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 3.9% in July 2020. In 2009, distressed sales comprised 70% of Miami sales. Total Miami distressed sales decreased 47.8% year-over-year in July 2021, from 92 to 48.
Short sales and REOs accounted for 0.5% and 0.8% year-over-year, respectively, of total Miami sales in July 2021. Short sale transactions increased 28.6% year-over-year while REOs decreased 61.5%.
Nationally, distressed sales represented less than 1% of sales in July 2021, equal to July 2020.
National, State Housing Demand Robust as More Inventory Expected to Arrive
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 2.0% from June to a seasonally adjusted annual rate of 5.99 million in July. Sales inched up year-over-year, increasing 1.5% from a year ago (5.90 million in July 2020).
Statewide, closed sales of single-family homes in July totaled 30,740, a slight decrease of 2.1% year-over-year, while existing condo-townhouse sales totaled 13,481, up 21.1% over July 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, the median existing-home price for all housing types in July was $359,900, up 17.8% from July 2020 ($305,600), as each region saw prices climb. This marks 113 straight months of year-over-year gains.
The statewide median sales price for single-family existing homes in July was $355,000, up 20.3% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month's statewide median price for condo-townhouse units was $253,000, up 20.5% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 99.6% in July 2021, up 3.9% from 95.9% last year. The median percent of original list price received for existing condominiums was 97%, up 3.4% from 93.8% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 17 days, a 71.2% decrease from 59 days last year. The median time to sale for single-family homes was 65 days, a 38.7% decrease from 106 days last year.
The median number of days between the listing date and contract date for condos was 43 days, down 48.8% from 84 days. The median number of days to sale for condos was 43 days, a 48.8% decrease from 84 days.
Miami Cash Sales 69.1% More than National Figure in July 2021
Cash sales represented 38.9% of Miami closed sales in July 2021, compared to 27.8% in July 2020. About 23% of U.S. home sales are made in cash, according to the latest NAR statistics.
The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash as well as some moving from more expensive U.S. markets who can buy more with their profits from real estate sales.
Cash sales accounted for 47.6% of all Miami existing condo sales and 24.7% of single-family transactions.
