Residential Real Estate News
Driven by California Tech and Wall Street Buyers, Miami Shatters Home Sales Record
Miami luxury home sales spike 346 percent, condo sales up 240 Percent year-over-year in Q2
According to the Miami Association of Realtors, Miami-Dade County real estate set a record for its most total home sales in the second quarter. Pent-up demand, coupled with California tech and Wall Street firms (and their employees) relocate to South Florida at scale in 2021.
Miami-Dade County total home sales surged 142.4% year-over-year, from 4,766 to 11,553. Miami single-family home transactions rose 66.9%, from 2,688 to 4,486. Miami single-family homes have now posted year-over-year sales gains in eight of the last nine quarters, a span of two-plus years. Miami existing condo sales increased 240.1%, from 2,078 to 7,067.
"Miami real estate continues to break records as more Northeastern and West Coast homebuyers and tech and finance companies relocate here," MIAMI Chairman of the Board Jennifer Wollmann said. "Miami real estate sales were rising before the pandemic, and the pandemic only accelerated the demand for our incredible live, work and play lifestyle. Many of today's buyers are making South Florida their primary home, which is important because these full-time residents boost, impact and diversify many sectors of our economy."
This is the best quarterly selling month since MIAMI began tracking stats in 1993. Transactions also show strong gains when comparing 2Q 2021 to 2Q 2019. Miami total home sales jumped 46.9% when comparing 2Q 2019 to 2Q 2021, from 7,861 to 11,553 transactions. Condo sales (up 76.3%) and single-family home sales (up 16.4%) rose from 2Q 2019 to 2Q 2021.
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.
Miami Luxury Sales Jump 346.4% as Northeast and West Coast Buyers Move to Mega Region
Miami-Dade County single-family home luxury ($1-million-and-up) transactions surged 346.4% year-over-year to 942 transactions in 2Q 2021. Miami-Dade County condo luxury sales increased 651.6% to 917 transactions in 2Q 2021.
Record-low interest rates; a record-high S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern and West Coast 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 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 single-family home median prices rose 31.6% year-over-year, from $380,000 to $500,000. Median prices have now increased for 38 consecutive quarters, a streak spanning 9.5 years. Miami existing condo median prices rose 25.8% year-over-year, from $262,250 to $330,000.
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.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. Also, 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 $9.3 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 single-family home dollar volume rose 195.8%, from $1.6 billion to $4.6 billion. Miami existing condo dollar volume increased 447.3% to $4.7 billion. The sales do not include Miami's multi-billion-dollar new construction condo market.
Non-distressed sales comprised about 98.4% of all closed residential sales in 2Q 2021 vs. 95.1% in 2Q 2020. Only 1.6% of all closed residential sales in Miami were distressed in 2Q 2021, including REO (bank-owned properties) and short sales, compared to 4.9% in 2Q 2020. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 0.5% and 0.2%, respectively, of total Miami sales in 2Q 2021. Short sale transactions stayed even year-over-year at 56 while REOs fell 29.6%.
Lower mortgage rates made home purchases more affordable in 2021. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.0% for 2Q 2021, down from the 3.23% average recorded during the same quarter a year earlier.
Robust Demand for Housing Statewide, Nationally Fueling Double-Digit Increase in Sales
Statewide, 2Q closed sales of existing single-family homes increased by 43.3% year-over-year (totaling 98,414), and were up nearly 16% compared to the 2Q 2019. Sales growth in the condo and townhouse resale market was even stronger, rising 117% (a total of 48,976 sales) compared to last year and up by almost 44% compared to two years ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.
The statewide median sales price for single-family existing homes in 2Q 2020 was $345,000, up 24.3% from the same time a year ago, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $250,000, up 20.8% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, median sales price of single-family existing homes rose 22.9% to $357,900, an increase of $66,800 from one year ago. All regions saw double-digit year-over-year price growth, which was led by the Northeast (21.8%), followed by the South (21.0%), West (20.9%), and Midwest (17.1%).
New Listings Rise: More Sellers Listing Properties Should Help Alleviate Lack of Supply
New listings for single-family homes rose 30.9% year-over-year in 2Q 2021, from 4,123 to 5,397. New listings for condos rose 40.8% year-over-year in 2Q 2021, from 5,645 to 7,947. This is a sign that more sellers are coming to the market.
At the current sales pace, the number of active listings represents 2.2 months of inventory for single-family homes (seller's market) and 5.1 for condominiums (seller's market). A balanced market between buyers and sellers offers between six and nine months of supply inventory.
Miami real estate had 11,262 active listings in 2Q 2021, a 41.8% drop from the 19,358 listings at the same time last year. The inventory for single-family homes dropped 42.1%, from 4,926 to 2,853. Miami existing condo inventory decreased 41.7%, from 14,432 to 8,409.
Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
With low inventory, particularly for single-family homes, Miami properties are attracting multiple bids and buyers going over-list price. The median percent of original list price received was 98.6% for single-family homes and 95.8% for condos in 2Q 2021.
The median time to contract for single-family home listings was 18 days, a 67.3% drop from 55 days in 2Q 2020. The median time to contract for existing condos was 56 days, a 27.3% drop from 77 days in 2Q 2020.
The median time to sale for single-family homes decreased 32%, from 100 days to 68. The median time to sale for existing condos decreased 18%, from 122 to 100.
Miami Cash Sales 70% More than National Figure in 2Q 2021
Cash sales represented 39.1% of Miami closed sales in 2Q 2021, compared to 37.3% in 2Q 2020. About 23 percent 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 are able to buy more with their profits from real estate sales.
Cash sales accounted for 48.1% of all Miami existing condo sales and 24.9% of single-family transactions.
