Residential Real Estate News
Miami Condo Sales Up 42 Percent in November
According to the Miami Association of Realtors, Miami-Dade County real estate posted its best November sales month in history as existing condo sales surged double digits year-over-year for the 14th consecutive month.
The red-hot market, fueled by domestic and global homebuyers, has now established all-time annual records for total home sales (set in 10 months), all-time annual condo sales (set in nine months), and the all-time annual single-family home sales (set in 11 months).
Miami-Dade County total home sales rose 22.9% year-over-year in November 2021, from 2,459 sales to 3,021. Miami single-family home transactions increased 1.2%, from 1,154 to 1,168. Miami existing condo sales increased 42%, from 1,305 to 1,853.
"The demand for Miami real estate is so high that not even November, a time usually known for a slower pace of deals because of the holidays, can slow down this historic market," MIAMI Chairman of the Board Jennifer Wollmann said. "Domestic buyers from high-tax, high-density states have migrated here as the availability of remote work has expanded exponentially with the pandemic. Vaccinated global buyers were allowed to resume travel to the U.S. in November and are only adding to the number of buyers interested in Miami properties."
Year-to-date, Miami has registered 35,961 existing total homes sales in 11 months, which surpasses the previous annual record of 30,041 transactions in the entire year of 2013, an increase of 19.7%.
Best November Sales Month in Miami History
Of the top-10 best home sales months in Miami history, nine have happened this year. June 2021 (with its 4,057 total transactions) remains the No. 1 overall sales month in Miami history. November 2021 (with its 3,021 sales) ranks as the eighth-best sales month overall since MIAMI began tracking stats in 1993.
Miami home sales are also significantly higher vs. November 2019. Miami total home sales are up 48.6% in November 2021 vs. November 2019, from 2,033 to 3,021. Miami single-family home sales (20.2% increase) and condo transactions (74.6% jump) are higher than November 2019.
Miami Luxury Sales Jump as Northeast and West Coast Buyers Move to Mega Region
Miami single-family luxury ($1-million-and-up) transactions rose 28.2% year-over-year to 209 sales in November 2021. Miami existing condo luxury ($1-million-and-up) sales surged 115.6% year-over-year to 207 transactions.
There are only 3.6 months of supply in luxury single-family homes and 8.4 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 coming here for the vaccine and purchasing property.
Vaccinated foreigners were allowed to resume travel to the U.S. back on Nov. 8 and that is leading to more international investment in South Florida - the No. 1 destination for foreign buyers. 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 increased 15.1% year-over-year to 405 transactions in November 2021. Miami existing condo sales priced between $400K to $600K increased 132.6% to 321 transactions.
New Listings Rise; More Inventory Arriving for Low-Supply/High-Demand Market Next Year
There is always a seasonal fade in inventory in the fall and winter. More inventory is expected to come to the market by spring 2022 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. Expectation that interest rates will rise should continue to drive demand in the first quarter of 2022.
The robust rate of sales, and not a lack of new listings coming on to the market, have kept inventories low. New listings of Miami single-family homes increased 2.9% to 1,434 from 1,393. New listings of condominiums increased 0.8%, from 2,094 to 2,111.
Inventory of single-family homes decreased 27.9% year-over-year in November 2021 from 3,889 active listings last year to 2,805 last month. Condominium inventory decreased 48.1% year-over-year to 7,179 from 13,820 listings during the same period in 2020.
Months' supply of inventory is down since July 2019 for single-family, reflecting strong demand. Months' supply of inventory for single-family homes decreased 41.7% to 2.1 months, which indicates a seller's market. Inventory for existing condominiums decreased 71.5% to 3.7 months, which indicates a seller's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of November 2021 decreased 43.6% year-over-year, from 17,709 to 9,984.
Nationally, total housing inventory the end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago.
Fed's Decision for More Rate Hikes in 2022 Should Slow Growth of Median Prices
The Fed's announcement last week that it will be raising rates and end bond buying in 2022, will accelerate demand for housing in the short term and eventually put downward pressure on median prices.
Miami-Dade County single-family median prices increased 11.7% year-over-year in November 2021, increasing from $450,000 to $502,750. Miami single-family median prices have risen for 120 consecutive months, a streak of 10 years. Existing condo median prices increased 28.1% year-over-year, from $270,000 to $346,000. Condo median prices have increased in most of the 122 of the last 126 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 mortgages 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 a 30-year, conventional, fixed-rate mortgage was 3.07 in November, equal to October's rate. The average commitment rate across all of 2020 was 3.11%.
NAR Chief Economist Lawrence Yun expects the 30-year fixed mortgage rate to increase to 3.7% by the end of 2022. It would be still lower than the pre-pandemic rate of 4%.
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.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021 and 2022, 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 $2.2 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 $2.2 billion in November 2021. Single-family home dollar volume increased 14.9% year-over-year, from $932.6 million to $1.07 billion. Condo dollar volume increased 92.8% year-over-year, from $586 million to $1.1 billion.
Miami Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 0.5% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 1.9% in November 2020. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 69.6% year-over-year in November 2021, from 46 to 14. Short sales and REOs accounted for 0.3% and 0.5% year-over-year, respectively, of total Miami sales in November 2021. Short sale transactions decreased 9.1% year-over-year while REOs decreased 57.1%.
Miami's percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented less than 1% of sales in November 2021, equal to the percentage in November 2020.
Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 98.4% in November 2021, up 1.3% from 97.1% last year. The median percent of original list price received for existing condominiums was 97.1%, up 2.8% from 94.5% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 20 days, a 13% decrease from 23 days last year. The median time to sale for single-family homes was 66 days, a 10.8% decrease from 74 days last year.
The median number of days between the listing date and contract date for condos was 36 days, down 28% from 50 days. The median number of days to sale for condos was 80 days, a 16.7% decrease from 96 days.
Miami Cash Sales 60% More than National Figure in November 2021
Cash sales represented 38.4% of Miami closed sales in November 2021, compared to 28.9% in November 2020. About 24% 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 46.9% of all Miami existing condo sales and 24.9% of single-family transactions.
