MIAMI — Miami-Dade County real estate posted its 7th-highest total existing home sales month in history and its second-best April sales month ever, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“The recent rise in mortgage rates should eventually temper the velocity of Miami’s record-setting real estate market appreciation, however ultimately inventory will tell the tale,” MIAMI Chairman of the Board Fernando Arencibia Jr. said. “Although we see opportunities for buyers to have more choices, with a slight increase on days on market and fewer bidding wars, the lack of equilibrium between demand and supply indicates that as we gradually head to a more balanced market Miami’s real estate sector should remain strong.”
Second-Best April Sales Month in History
Miami total closed sales in April 2022 performed above the level they were leading up to the pandemic despite higher mortgage rates, lower supply and higher sale prices.
Miami’s April 2022 total home sales count decreased year-over-year (3,445 in April 2022 vs. 3,960 in April 2021) but performed significantly higher than every April outside of April 2021.
The April 2021 sales total surged so high because it benefited from 2.5% mortgage rates, higher supply (particularly in condos) and pandemic-driven demand. Miami has historically averaged about 2,306 total home sales in April, compared with 3,445.
Many of the homes that sold in April 2022 had their rates established in February and March when mortgage rates were at 4%. 2018 marked the last time mortgage rates were at the level. Miami April 2022 total home sales finished 32.4% higher than Miami’s total in April 2018.
The April 2022 total home sales count finishes as the seventh-highest total home sales month in Miami-Dade County history. The top-10 highest total sales months have been achieved in the last two years. June 2021 remains No. 1 with 4,057 total home transactions in a single month.
Miami existing condo sales decreased 7.4% year-over-year, from 2,376 in record-breaking April 2021 to 2,199 in April 2022. Single-family home sales decreased 21.3% year-over-year, from 1,584 in record-breaking April 2021 to 1,246 in April 2022. Sales declined because it’s in comparison to a record-setting 2021 market that had 2.5% mortgage rates, higher supply and pandemic-driven demand. The April 2022 condo and single-family home sales totals are higher than every other April outside of April 2021.
Miami Luxury Condo Sales Stay Even; Mid-Market $400-600K Condo Transactions Jump
Miami existing condo luxury ($1-million-and-up) sales stayed about even in April 2022, down a negligible 0.3% to 313 transactions, which are in a record-high range. Miami single-family luxury transactions decreased 31.2% year-over-year to 247 sales in April 2022 because of low inventory.
Miami luxury condos boast an inventory of 5.8 months of supply, portending more future growth in the sector given the high demand. There are 4 months of supply in luxury single-family homes. Luxury months of supply continues to trend downward for all property types because of the robust demand.
Homebuyers leaving tax-burdened states to purchase in Florida (no state income tax), new-to-market firms moving here, low interest rates, the appeal of property as an inflation hedge, rising wages and accrued savings in lockdowns, strong equity market performance, a reassessment of housing needs and lifestyles because of the pandemic and expansion of remote work are all factors driving South Florida real estate demand.
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 in November 2021 and that is leading to more international investment in South Florida – the No. 1 destination in the U.S. 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, along with all our amenities.
Miami existing condo sales priced between $400K to $600K increased 15.8% year-over-year to 404 transactions in April 2022. Miami single-family homes priced between $400K to $600K decreased 11.1% year-over-year to 463 transactions in April 2022, due to lack of inventory.
Rising Mortgage Rates Should Eventually Slow Price Growth Nationally, in Miami
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Demand for Miami real estate is at all-time highs. Inventory for Miami single-family homes (1.9 months) and condos (2.3 months) are low.
Locally, the greater share of Miami luxury sales is also part of the reason for the large year-over-year increase in median prices.
To battle national inflation, the Federal Reserve has raised rates two times this year and has plans for more hikes. High inflation and the Fed’s tightening policy are the main drivers behind rising mortgage rates.
Mortgage rates have risen more than 2 percentage points since the beginning of the year. The monthly mortgage payment has increased by about $520 since the first week of January, when rates averaged 3.2%, according to NAR.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.98% in April, up from 4.17% in March. The average commitment rate across all of 2021 was 2.96%.
The mortgage rate is projected to land at 5.3% by 4Q 2022, according to NAR. That is still low compared to an all-time average of about 8% in the U.S.
Long term, the hope is higher rates will lead to more days on the market (gives buyers more choices). Higher rates will eventually lead to a moderation of the growth rate of pricing. With the growth rate of pricing cooling, total inventory could grow later. Historically, inventory expands six months after rates rise, but today’s market is unlike any other.
Miami-Dade County single-family home median prices increased 9.7% year-over-year in April 2022, increasing from $515,000 to $565,000. Miami single-family median prices have risen for 125 consecutive months (10.4 years), the longest running-streak on record. Existing condo median prices increased 20% year-over-year, from $325,000 to $390,000. Condo median prices have increased in 127 of the last 131 months.
More Inventory Needed for Low-Supply/High-Demand Market
Historically in the U.S., total inventory tends to expand six months after mortgage rates begin to rise. A new study by Realtor.com detailed that 64% of possible sellers intend to list their home by October 2022.
New listings of Miami single-family homes decreased 7.1% to 1,647 from 1,773. New listings of condominiums decreased 11.3%, from 2,577 to 2,287.
Inventory of single-family homes decreased 13.8% year-over-year in April 2022 from 2,744 active listings last year to 2,366 last month. Condominium inventory dropped 51.5% year-over-year to 4,711 from 9,709 listings during the same period in 2021.
Months’ supply of inventory is down since July 2019 for single-family, reflecting strong demand. Months’ supply of inventory for single-family homes decreased 13.6% to 1.9 months, which indicates a seller’s market. Inventory for existing condominiums decreased 67.6% to 2.3 months, which also 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 April 2022 decreased 43.2% year-over-year, from 12,453 to 7,077.
Nationally, total housing inventory at the end of April amounted to 1,030,000 units, up 10.8% from March and down 10.4% from one year ago (1.15 million). Unsold inventory sits at a 2.2-month supply at the current sales pace, up from 1.9 months in March and down from 2.3 months in April 2021.
Miami Real Estate Had a $311 Million Local Economic Impact Just in April 2022
Every time a home is sold it impacts the economy: income generated from real estate industries (commissions, fees and moving expenses), expenditures related to home purchase (furniture and remodeling expenses), multiplier of housing related expenditures (income earned as a result of a home sale is re-circulated into the economy) and new construction (additional home sales induce added home production).
The total economic impact of a typical Florida home sale is $90,300, according to NAR. Miami-Dade County sold 3,445 homes in April 2022 and had a local economic impact of $311 million.
Miami total dollar volume totaled $2.8 billion in April 2022. Single-family home dollar volume decreased 28.53% year-over-year, from $1.8 billion to $1.3 billion. Condo dollar volume decreased 6.59% year-over-year, from $1.7 billion to $1.5 billion.
Miami Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 1.3% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, lower than the 1.5% in April 2021. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 25% year-over-year in April 2022, from 45 to 60. Short sales and REOs accounted for 0.4% and 0.9% year-over-year, respectively, of total Miami sales in April 2022. Short sale transactions decreased 23.5% year-over-year while REOs increased 25.6%.
Miami’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented less than 1% of sales in April 2022, down from 2% in April 2021.
Miami’s Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 28,171, down 15.3% year-over-year, while existing condo-townhouse sales totaled 13,711, down 20.9% over April 2021. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, slid 2.4% from March to a seasonally adjusted annual rate of 5.61 million in April. Year-over-year, sales dropped 5.9% (5.96 million in April 2021).
The statewide median sales price for single-family existing homes was $410,000 up 21.8% 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 $310,000, up 24% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, the median existing-home price for all housing types in April was $391,200, up 14.8% from April 2021 ($340,700), as prices increased in each region. This marks 122 consecutive months of year-over-year increases, the longest-running streak on record.
Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 100% in April 2022, up 2.1% from 97.9% last year. The median percent of original list price received for existing condominiums was 99.4%, up 4.3% from 95.3% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 14 days, a 30% decrease from 20 days last year. The median time to sale for single-family homes was 59 days, a 15.7% decrease from 70 days last year.
The median number of days between the listing date and contract date for condos was 25 days, down 52.8% from 53 days. The median number of days to sale for condos was 69 days, a 27.4% decrease from 95 days.
Miami Cash Sales 68.5% More than National Figure in April 2022
Cash sales represented 43.8% of Miami closed sales in April 2022, compared to 37.8% in April 2021. About 26% 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 52.4% of all Miami existing condo sales and 28.5% of single-family transactions.
To access April 2022 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 (MIAMI) was chartered by the National Association of Realtors in 1920 and is celebrating 102 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations: MIAMI RESIDENTIAL, MIAMI COMMERCIAL; BROWARD-MIAMI, a division of MIAMI Realtors; JTHS-MIAMI, a division of MIAMI Realtors in the Jupiter-Tequesta-Hobe Sound area; MIAMI YPN, our Young Professionals Network Council; and the award-winning MIAMI Global Council. MIAMI REALTORS represents over 60,000 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 226 international organizations worldwide. MIAMI REALTORS has just launched its new YPN Global and will host the first-ever YPN Global Congress in March 2023 in Dubai. MIAMI has just been selected to host the prestigious FIABCI World Congress in June 2023. MIAMI’s official website is www.MiamiRealtors.com