Miami Experiences First Sales Decline in Years in Early 2016

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According to the Miami Association of Realtors, despite mid-market single-family homes and condominiums registering double-digit sales growth in the first quarter of 2016, total residential sales in the greater Miami market declined 8.9 percent year-over-year in the first quarter of 2016 - for the first time in years.

The $200,000 to $600,000 single-family home sector posted a 10.6 percent year-over-year sales increase in the first quarter of 2016. The sector, which comprised 59.5 percent of all Miami single-family closed sales last quarter, had 1,765 sales in 1Q 2016 versus 1,596 in 1Q 2015. In existing condos, the $150,000 to $300,000 price range registered a 12.8 percent sales increase, growing from 1,148 to 1,295. The sector comprised 38.9 percent of all existing condo closed sales last quarter.

"Miami real estate priced in the mid-market continues to be a major attraction for home buyers from all over the world," said Mark Sadek, the 2016 M.A.R. Chairman of the Board. "Today's historic-low mortgage rates and South Florida's diversified and growing job market are encouraging more consumers to purchase property in one of America's most dynamic cities."

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.74 percent for 1Q 2016, slightly up from the 3.72 percent average recorded during the same quarter a year earlier.

Total Sales Decline But Remain in Line with Historical Averages

Total existing Miami-Dade County residential sales -- which posted a record year in 2013 and near record years in 2014 and 2015 -- declined 8.9 percent year-over-year in the first quarter of 2016, from 6,908 sales to 6,294.

Single-family home sales -- which have posted three consecutive years of record sales -- declined 6.8 percent in 1Q 2016, from 3,184 to 2,968. Existing condo sales fell 10.7 percent, from 3,724 to 3,326. Existing condos are competing with a robust new construction market, which continues to add inventory.

More than Four Years of Consecutive Price Growth

The median price for single-family homes in Miami-Dade County increased to $275,000 in the first quarter, a 10 percent jump from $250,000 in the same period last year. The median price for existing condominiums increased 4.3 percent year-over-year from $198,000 to $206,450.

All Miami-Dade County residential properties have now seen 17 consecutive quarters of price growth, a span stretching more than four years. Despite the steadfast growth, Miami prices remain at 2004 levels.

Miami's residential properties remain more affordable than other global cities, according to the National Association of Realtors 2015 Profile of Home Buying Activity of International Clients. NAR analyzed the cost of a 120-square meter condo in a number of foreign cities based on prices reported in the Global Property Guide. A 120-square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average. 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.

Nationally, the median existing single-family home price in the first quarter was $217,600, up 6.3 percent from the first quarter of 2015 ($204,700), according to NAR. The national median existing-condo price was $204,700 in the first quarter, up 5.8 percent from the first quarter of 2015 ($193,500).

Statewide, the median sales price for single-family existing homes in 1Q 2016 was $203,500, up 11.8 percent from the same time a year ago, according to Florida Realtors. The Florida median price for condos during the quarter was $153,000, up 5.5 percent over the year-ago figure.

National, State Residential Sales in 1Q

Nationally, total existing-home sales for single-family and condominiums rose 1.7 percent to a seasonally adjusted annual rate of 5.29 million in the first quarter from 5.20 million in the fourth quarter of 2015, and are 4.8 percent higher than the 5.05 million pace during the first quarter of 2015, according to the National Association of Realtors.

Statewide, closed sales of single-family homes statewide totaled 57,913 in 1Q 2016, slightly up (0.3 percent) over the 1Q 2015 figure, according to Florida Realtors. Florida's townhome-condo market totaled 24,534 during 1Q 2016, down 6.1 percent compared to 1Q 2015.

Miami Total Active Listings Rise in 1Q

Seller confidence in Miami's housing market continued to expand in the first quarter. Miami real estate had 20,446 active listings in the first quarter, a 13.3 percent increase from the 18,046 listings at the same time last year.

The inventory for single-family homes increased 8.2 percent, from 6,004 to 6,494. Miami existing condo inventory grew 15.9 percent, from 12,042 to 13,952.

The Miami single-family home sector is in a seller's market, while existing condos are in a buyer's market. At the current sales pace, the number of active listings represents 5.7 months of inventory for single-family homes and 10.8 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.

Miami Existing Homes, Condos Selling Faster

The median time to contract for single-family home listings was 59 days, a 15.7 percent decrease from 70 days in 1Q 2015. The median time to contract for existing condos was 72 days, a 10 percent decrease from 80 days in 1Q 2015.

The median number of days between the listing date and closing date also declined for all properties. The median time to sale for single-family homes decreased 7.1 percent, from 126 days to 117. The median time to sale for existing condos fell 4 percent, from 125 days to 120.

The median percent of original list price received was 95.3 percent for single-family homes and 93.9 percent for condos in 1Q 2016.

Miami Cash Sales More than Double National Average

Miami continues to register more than double the U.S. average of residential cash buyers. About 51 percent of Miami closed sales in the first quarter of 2016 were all cash. About 25 percent of U.S. home properties are made in cash, according to the latest NAR statistics. About 56.4 percent of all Miami housing transactions were made in cash in 1Q 2015.

Statewide, cash sales represented 43 percent of all closed sales in the first quarter of 2016, down from 49.5 percent during the same period last year.

About 65.3 percent of all Miami existing condo sales are made in all-cash. In the single-family sector, about 35 percent of all transactions are made in cash. 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.