Miami Housing Prices Continue to Stabilize in 3Q, Says New Douglas Elliman Florida Report

---

(MIAMI, FL) -- Based on a newly released Miami housing market report by Douglas Elliman Florida, residential property prices continued to show stability in the third quarter of 2011.

The market share of distressed sales, which are roughly one third the size of non-distressed sales, fell from 62.9% in the prior year quarter to 53.3%. The shift toward higher priced sales caused the price indicators to post double digit gains, when in fact, both markets are relatively stable.

The number of sales increased 4.6% to 4,979 sales in the third quarter from 4,762 sales in the same period a year ago, the third highest number of sales since at least 2006. Non-distressed sales jumped 31.1%, while distressed sales fell 11.3% over the same period.

Days on market was unchanged over the past year. It took an average of 72 days to sell a property in the third quarter, unchanged from the third quarter last year, consistent with the five-year, 71-day average.

Douglas Elliman Florida CEO Vanessa Grout tells the World Property Channel, "The demand in Miami has rapidly re-established with buyers seeking to benefit from a well-priced property in a sought-aftermarket."

"Miami has increasingly become a favored area for relocation and vacation home buyers. This has been one of several factors driving demand upwards and pitted against constricted supply, positively affected values. "

All three housing price indicators posted year-over- year double-digit gains as last year's "robo-signing" scandal continued to keep banks from releasing their foreclosure inventory to the market until they become more comfortable that their process is not flawed for fear of legal exposure.

The median sales price of a Miami property was $165,000, 10% above $150,000 in the prior year quarter and 1.5% above $162,500 in the second quarter. The average price per square foot and average sales price followed the same year-over-year pattern. The third quarter average price per square foot jumped 14.2% to $209 and the average sales price jumped 18.7% to $322,072 compared to the prior year quarter.

One of the flaws in reporting the state of the Miami housing market has been the continued lack of differentiation between the distressed and non-distressed markets, yet distressed sales accounted for 53% of the market and non-distressed accounted for nearly 47% of the market. Median sales price for non-distressed condos and 1-family homes showed single-digit year-over-year gains as the distressed sales prices remained stable.

There were 4,979 condo and 1-family sales in the third quarter, 4.6% more than 4,762 sales in the prior year quarter and the third highest total since at least 2006-when the MLS market archive began. In the third quarter, 62% of the sales were condos and 38% were 1-family houses, largely unchanged from the prior year quarter.

The tightness in mortgage underwriting continued to challenge buyers, as cash purchases accounted for 62.6% of all sales in the third quarter, up from 59.3% in the prior year quarter. Conventional financing fell to 22.3% of all sales while FHA financing fell to 11.6% over the same period.

Grout further commented, "I am often asked where I see the prices of real estate going. One of the undercurrents that cause a tricky examination of pricing trend in our market is the divergence in the performance of distressed vs. non-distressed markets - think of it as two separate markets behaving differently. I can tell you that while sales are up sharply, pricing overall moves sideways. This is the expected outcome with a steady increase in non-distressed pricing coupled with a fluctuating and voluminous outpouring of distressed sales." 



Condo Market

• Sales edged above last year's activity level-- There were 3,089 sales in the third quarter, 3.6% above 2,982 sales in the prior year quarter and the fourth consecutive quarter above the 3,000 sales threshold.

• Price indicators posted double-digit gains-- The median sales price of a Miami condo was $140,000 in the third quarter, 12% higher than $125,000 in the same period last year. Average price per square foot jumped 12.4% to $226 and average sales price jumped 15.4% to $271,329 over the same period.

1-Family Market

• Price indicators increased with significant uptick in the high end market-- While the median sales price showed an nominal 0.7% increase to $200,000 from $198,700 in the prior year quarter, the average sales price, price per square foot and the highest two price quintiles posted significant double-digit gains over the same period, as active inventory edged lower in recent quarters.

• More sales in third quarter than same period a year ago-- The third quarter saw a 6.2% increase in activity to 1,890 sales from 1,780 in the prior year quarter.

Luxury Market

• Condo prices as average size remained stable-- The median sales price of a condo increased 10.7% to $830,000. Price per square foot and average sales showed larger gains, even though average square footage increased a modest 1.1% to 2,301 over the same period.

• 1-family houses showed jump in price despite modest increase in size--Median sales price surged 24.5% to $1,370,000, while the average square footage of a sale increased 6.1% to 4,640 square feet over the same period.

North Market

• Condo price indicators rose along with sales-- Condo sales jumped 10% to 650 sales as median sales price rose 15% to $207,000, both from the prior year quarter.

• 1-family sales showed volatility due to small market share-- Median sales price declined 9.1% to $456,856 from the prior year quarter.

Miami Beach Market

• Condo sales edged higher as prices jumped-- There were 295 sales, 6.5% more than last year, as median sales price surged 14.3% to $280,000 over the same period.

• 1-family sales at one year high, prices skewed by high end-- Median sales price increased 4.9% to $905,000, as number of sales jumped 31.5% from the prior year quarter.

South Beach Market

• Condo prices jumped with shift towards high end-- Sales increased 6.7% to 288 sales as median sales price surged 28.1% to $238,250 as compared to the prior year quarter.

• High end sales skewed price indicators-- Median sales price more than doubled over the past year to $1,900,000 in the small 13 sale submarket.

Downtown Market

• Condo sales slipped as prices edged higher-- There were 1,726 sales, 1.6% less than in the prior year quarter, as median sales price rose 2.2% to $91,000.

• 1-family sales flat as prices declined-- Median sales price slipped 3.5% to $167,000 and sales remained unchanged at 1,471 compared to the prior year quarter.

South Market

• Condo price indicators mixed as sales surged-- There were 130 sales in the third quarter, 44.4% more than the same period last year.

• Sales of 1-family homes jumped, price indicators mixed-- The median sales price slipped 1.8% to $555,000, as the number of sales surged 32.7% to 296 from the same quarter last year.

Non-Distressed Market

• All condo price indicators posted single-digit gains as sales surged-- Median sales price edged 2.2% higher to $235,000 from the prior year quarter. All price indicators showed gains, despite a 3.4% decline in average square footage to 1,359 as compared to the prior year quarter. The quarter saw 1,404 sales, 35.1% more than the same period last year.

• 1-family sales jumped as price indicators rose-- There were 916 sales in the third quarter, 25.5% more than the same period last year. Median sales price increased 6.4% to $324,500 from the prior year quarter. The other price indicators posted double-digit gains, skewed by an increase in high-end sales.

Distressed Market

• Condo price indicators were flat as sales fell sharply-- Median sales price saw a nominal gain of 0.8% to $91,402 from the prior year quarter, while the other indicators were mixed. The number of sales fell 13.5% to 1,681 over the same period as lenders continued to hold back their release of foreclosures.

• 1-family price indicators slipped as sales dropped-- There were 974 sales in the third quarter, 7.2% below the prior year quarter total. All three price indicators posted nominal year-over-year declines. Median sales price slipped 0.3% to $149,500 over the same period.

---