MIAMI — Miami-Dade County median prices increased year-over-year in July 2020 as total home sales and new pending sales continued trending upward, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
New pending home sales rose by double digits for the second consecutive month. Pending sales are a future indicator of closings one to two months out. New pending sales for Miami single-family homes increased 23.8% year-over-year to 1,692. New pending sales for condos increased 6% in July to 1,454.
“The surge in pending sales will result in a significant increase in closed sales in the next couple of months as Miami real estate continues its remarkable recovery from the global COVID-19 situation,” MIAMI Chairman of the Board Jorge L. Guerra Jr. said. “Pent-up demand, historically low mortgage rates and the robust fundamentals of the South Florida housing market is leading to increased buying activity.”
Pending sales began surging in mid-April and are stronger than they were before the COVID-19 stay home orders.
Mortgage applications, another indicator of future sales, are on the rise in South Florida and nationally, as the Miami mega region continues to see additional homebuying interest from the Northeast. The Mortgage Bankers Association (MBA) reported on Aug. 19 that the purchase index increased slightly by 1% on an adjusted basis. The purchase index remained 27% higher than the same week in 2019.
The COVID-19 situation has accelerated the trend of homebuyers from New York and cold weather and tax-burdened Northeastern states searching and purchasing homes in South Florida.
Before the COVID-19 situation, the Miami-Dade market was exceptionally strong. Miami real estate had record low delinquencies, no subprime mortgage crisis, strong demand/low supply, low interest rates, strong population growth, demand from foreign buyers and tax refugees from tax burdened states, high consumer confidence and a strong job market.
104 Consecutive Months of Price Appreciation in Miami
Strong demand coupled with limited supply continue to drive price appreciation in Miami-Dade.
Miami-Dade County single-family home prices increased 10.2% year-over-year in July 2020, increasing from $372,000 to $410,000. Miami single-family home prices have risen for 104 consecutive months, a streak of 8.5-plus years. Existing condo prices increased 4.2% year-over-year, from $249,500 to $260,000. Condo prices have increased or stayed even in 106 of the last 110 months.
Miami, where the median price is still comparable to 2007 figures, remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 93 square meters of prime property, according to Knight Frank’s 2019 The Wealth Report. Monaco (16 square meters), Hong Kong (22), New York (31), Los Angeles (36) and others offer significantly less prime land for $1 million.
Miami Total Home Sales Decrease
Miami total home sales decreased 7.5% year-over-year in July 2020, from 2,490 to 2,303. Miami single-family home sales decreased 6% year-over-year in July 2020, from 1,270 to 1,194. Miami existing condo transactions declined 9.1% year-over-year in July 2020, from 1,220 to 1,109.
Close sales decreases since COVID-19 have significantly declined month-to-month. This is partly due to insufficient supply for single-family and for condos depending on price point.
Single-Family Home Dollar Volume Increases
Single-family home dollar volume increased 0.6% year-over-year, from $805.3 million to $810.4 million. Condo dollar volume decreased 2.9% year-over-year, from $466.9 million to $453.3 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.02% in July, down from 3.16% in June. The average commitment rate across all of 2019 was 3.94%.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
A new condo approval process is expected to increase sales. The new guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR has championed, are expected to generate increased homeownership opportunities.
Miami Distressed Sales Stay Low, Reflecting Healthy Market
Only 3.9% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 4.9% in July 2020. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 25.8%, from 124 to 92.
Short sales and REOs accounted for 0.6% and 3.4% year-over-year, respectively, of total Miami sales in July 2020. Short sale transactions decreased 46.2% year-over-year while REOs decreased 20.4%.
Nationally, distressed sales represented less than 1% of sales in July, down from 3% in June up from 2% in June 2019.
Miami Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 95.9% in July up 0.4% from 95.5% last year. The median percent of original list price received for existing condominiums was 93.8%, down 0.2% from 94% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 46 days, a 11.5% decrease from 52 days last year. The median number of days between the listing date and closing date for condos was 72 days, the same from last year.
The median time to sale for single-family homes was 92 days, a 6.1% decrease from 98 days last year. The median number of days to sale for condos was 116 days, a 2.7% increase from 113 days.
National and State Statistics
Nationally, total existing-home sales transactions jumped 24.7% from June to a seasonally-adjusted annual rate of 5.86 million in July. The previous record monthly increase in sales was 20.7% in June of this year. Sales rose year-over-year, up 8.7% from a year ago (5.39 million in July 2019).
Statewide, last month’s closed sales of single-family homes statewide rose 11.7% year-over-year, totaling 31,436, while existing condo-townhouse sales totaled 11,147, up 6.5% – the first year-over-year increase in this category since March. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
The national median existing-home price for all housing types in July was $304,100, up 8.5% from July 2019 ($280,400), as prices rose in every region. July’s national price increase marks 101 straight months of year-over-year gains. For the first time ever, national median home prices breached the $300,000 level.
In July, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for the 103rd consecutive month. The statewide median sales price for single-family existing homes was $295,000, up 10.1% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $210,000, up 11.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Miami’s Cash Buyers Top National Figure
Miami cash transactions comprised 27.8% of July 2020 total closed sales, compared to 30.3% last year. The national figure for cash buyers is 16%.
Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Miami’s cash purchases as 40.9% of condo closings were made in cash in July 2020 compared to 15.6% of single-family home sales.
Seller’s Market for Single-Family Homes, Buyer’s Market for Condos
Inventory of single-family homes decreased 32.1% in July from 6,489 active listings last year to 4,409 last month. Condominium inventory decreased 6.1% to 14,444 from 15,378 listings during the same period in 2019.
Months supply of inventory for single-family homes decreased 28.3% to 4.3 months, which indicates a seller’s market. Inventory for existing condominiums increased 6.8% to 14.2 months, which indicates a buyer’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Months supply of inventory is down since July 2019 for single-family and since March 2019 for condos, reflecting strong demand.
Total active listings at the end of July decreased 13.8% year-over-year, from 21,867 to 18,853. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Miami single-family homes decreased 2.8% to 1,563 from 1,608. New listings of condominiums increased 10.2%, from 2,133 to 2,350.
Inventory of active listings has decreased the last 12 months for single-family homes.
Nationally, total housing inventory at the end of July totaled 1.50 million units, down from both 2.6% in June and 21.1% from one year ago (1.90 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, down from 3.9 months in June and down from the 4.2-month figure recorded in July 2019.
To access July 2020 Miami-Dade Statistical Reports, visit http://www.SFMarketIntel.com
Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.
About the MIAMI Association of Realtors
The MIAMI Association of Realtors was chartered by the National Association of Realtors in 1920 and is celebrating 100 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward-MIAMI Association of Realtors, the Jupiter Tequesta Hobe Sound (JTHS-MIAMI) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents 52,000 total real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S. and has official partnerships with 223 international organizations worldwide. MIAMI’s official website is www.miamirealtors.com