Miami's Cash Buyers Still Twice National Average as Prices Climb Higher

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According to the Miami Association of Realtors, Miami-Dade County median sales prices continued to rise in January 2016 as existing single-family homes and condominiums sold close to list price.

The median sales price for single-family existing homes rose 13.7 percent year-over-year in January 2016, from $237,500 to $270,000. Single-family home prices remain at 2004 levels despite four years of increases. The median sales price for existing condominiums increased 8.8 percent in January to $205,000 from $188,500 a year ago. Miami-Dade County existing condo prices have risen in 55 of the last 56 months, a period encompassing more than four and a half years.

"On the heels of a historic 2015 that saw Miami real estate register its most-ever single-family home sales and its third-most total residential transactions, Miami properties remain in high demand," said Mark Sadek, the 2016 MAR Chairman of the Board. "Properties are selling for higher prices and near asking. While total residential sales decreased in January, single-family home and condominium sales remain consistent with historic averages."

Total Sales Finish below Highest Record Year Pace

Total existing Miami-Dade County residential sales -- which posted a record year in 2013 and near record years in 2014 and 2015 -- decreased 12.1 percent from 2,043 sales in January 2015 to 1,796 last month. January 2016's total sales are in the range of Miami sales during the past five Januarys.

Miami-Dade County single-family home transactions were 14.4 percent lower year-over-year in January, from 963 to 824. Existing condominium sales declined 10.0 percent in January 2016, from 1,080 to 972.

"Strong sales are important for a healthy residential real estate market, but it is not sustainable to set a new all-time sales record each year," said Teresa King Kinney, chief executive officer for MAR. "Miami-Dade County's five years of record sales have been unique in the U.S. real estate market. It is anticipated Miami will continue in a sales range consistent with a strong market."

Miami's 824 single-family home sales in January 2016 remain consistent with historical averages. The sector registered 963 and 823, respectively, in January during the single-family record-breaking years of 2013 and 2014. Miami posted 691 single-family home sales in January 2012.

Miami-Dade has continued to experience a significant year-over-year decrease in distressed sales. Increased competition from new condominium construction has also played a role in the lower total residential sales. Only 22.2 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 34.9 percent in January 2015.

Short sales and REOs accounted for 4.4 and 15.7 percent, respectively, of total Miami sales in January. Short sale transactions dropped 50.6 percent year-over-year while REOs fell 42.2 percent.

Nationally, distressed sales were 9 percent of sales in January, down from 11 percent a year ago.

Transactions in Popular Price Points Rise Significantly

Single-family home sales spiked 18.3 percent year-over-year in January in the $250,000 to $400,000 sector, growing from 241 to 285. This sector represented about 34.6 percent of all total single-family home sales in January 2016.

Existing condos priced at $150,000 to $300,000 range saw a 25.1 percent spike in January sales, increasing from 299 to 374.

Historic-low mortgage rates should continue to attract future buyers. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage sat at 3.87 percent in January. Interest rates have stayed below 4 percent for six consecutive months.

Miami Real Estate Selling Faster and Close to List Price

The average percent of original list price received for single-family homes was 95.5 percent in January 2016, an increase of 1.3 percent from a year earlier. The average percent of original list price received for existing condominiums was 93.3 percent, a 0.3 percent year-over-year increase.

The median days on the market for all Miami properties increased in January. New mortgage disclosure rules, known as the TILA-RESPA Integrated Disclosures (TRID), could be playing a role. The average time to close a loan nationally has grown steadily since TRID went into effect, climbing from 46 days in October to 49 days in November and December and to 50 days in January.

In Miami, the median number of days on the market for single-family homes increased 41.2 percent to 72 days in January 2016 from 51 days in January 2015. The median number of days on the market for Miami condominiums was 89 days, a 34.8 percent increase from 66 days in January 2015.

New Policy Should Qualify More South Florida Condo Buildings for FHA Loans

Miami existing condominiums have been impacted by a lack of access to mortgage loans. Of the 8,523 condominium buildings in Miami-Dade and Broward Counties, only 23 are approved for Federal Housing Administration loans, down from 29 last year, according to statistics from the Florida Department of Business and Professional Regulation and FHA.

A new FHA policy, however, should qualify more South Florida condo buildings. On Nov. 12, the FHA announced plans to streamline the condominium recertification process, expand its definition of acceptable owner-occupied units to include second homes not owned by investors and change the way it views co-insurance clauses. The government affairs team of the MIAMI Association of Realtor advocated for the changes and continues to monitor and support increased condominium recertifications.

National and State Statistics

Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops increased 0.4 percent to a seasonally adjusted annual rate of 5.47 million in January from a downwardly revised 5.45 million in December, according to the National Association of Realtors (NAR). Sales are now 11.0 percent higher than a year ago - the largest year-over-year gain since July 2013 (16.3 percent).

Statewide, closed sales of existing single-family homes totaled 16,529 last month, up 2.7 percent from the January 2015 figure, according to Florida Realtors. Florida's condominium sales totaled 6,942 last month, down 4.8 percent compared to January 2015.

The national median existing-home price for all housing types in January 2016 was $213,800, up 8.2 percent from January 2015 ($197,600), according to NAR. The increase marks the 47th consecutive month of year-over-year gains.

The statewide median sales price for single-family existing homes last month was $199,000, up 13.7 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties was $152,000, up 10.9 percent over the year-ago figure.

Miami's Cash Buyers Still Represent Twice the National Average

In January 2016, cash transactions comprised 52.6 percent of Miami's total closed sales, which is still double the national average. Just 26 percent of all U.S. housing sales are made in cash, according to NAR. Cash transactions represented 57.3 percent of total Miami deals in January 2015. 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 65.7 percent of condo closings were made in cash in January compared to 37.1 percent of single-family home sales.

Seller's Market for Existing Single-Family Homes, Buyer's Market for Condos

Inventory of single-family homes decreased 2.3 percent in January from 6,524 active listings last year to 6,372 last month. Condominium inventory increased 14.1 percent to 13,454 from 11,791 listings during the same period in 2014.

At the current sales pace, there is a 5.5-month supply of Miami single-family homes, a decrease of 3.9 percent from January 2015 and continues to be a sellers' market. There is a 10.2-month supply of condominium inventory, a year-over-year increase of 16.8 percent and continues to be a buyers' market. A balanced market between buyers and sellers offers between six and nine months' supply of inventory.

Total active listings at the end of January increased 8.3 percent year-over-year, from 18,315 to 19,826. Active listings remain about 60 percent below 2008 levels when sales bottomed.

New listings of Miami single-family homes decreased 5.8 percent from 2,356 in January of last year to 2,220 last month. New listings of condominiums increased 7.0 percent to 3,414 last month, compared to 3,190 during the same time period in 2014.

Nationally, total housing inventory at the end of January increased 3.4 percent to 1.82 million existing homes available for sale, but is still 2.2 percent lower than a year ago (1.86 million). Nationally, unsold inventory is at a 4.0-month supply at the current sales pace.

New Construction Market

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

Thirty-nine towers with 709 floors and 3,729 units have been completed in Miami-Dade County east of I-95 in the four years since 2011, according to the Feb. 22 report. There are 78 towers with 1,769 floors and 11,201 units under construction in Miami east of I-95. About 59 towers with 1,337 floors and 7,954 units are planned, but have not begun development. About 86 towers, 2,045 floors and 13,982 units are proposed.