MIAMI — Martin County total active listings increased in May 2022 as mid-market and luxury sales jumped, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“Higher rates are helping to bring more inventory to the high-demand, low supply market of Martin County and Stuart real estate,” JTHS-MIAMI President Brad Westover said.
Martin County $1-Miliion-And-Up Luxury Home Sales Rise
Martin’s May 2022 total home sales decreased year-over-year (329 in May 2022 vs. 414 in May 2021) because of low inventory and rising mortgage rates.
Martin existing condo sales decreased 19.9% year-over-year, from 141 in May 2021 to 113 in May 2022, due to lack of inventory and rising mortgage rates. Single-family home sales decreased 20.9% year-over-year, from 273 in May 2021 to 216 in May 2022, due to lack of inventory and rising mortgage rates.
The May 2021 sales total surged so high because it benefited from 3% mortgage rates, higher supply (particularly in condos) and pandemic-driven demand.
Many of the homes that sold in May 2022 had their rates established in March and April when mortgage rates were at 5%. 2018 marked the last time mortgage rates were at the level.
Martin single-family luxury transactions increased 26.3% year-over-year to 48 sales in May 2022. Martin existing condo luxury ($1-million-and-up) sales increased 150% year-over-year in May 2022 to 10 transactions.
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.
Mid-Market $400K-$600K Sales Jump
Martin existing condo sales priced between $400K to $600K increased 116.7% year-over-year to 13 transactions in May 2022. Martin single-family homes priced between $400K to $600K increased 9.7% year-over-year to 68 transactions in May 2022.
Mid-market condo sales are increasing because that’s where the higher inventory is. Global buyers prefer to purchase condos. With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers.
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.
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 Martin real estate is at all-time highs. Inventory for Martin single-family homes (1.7 months) and condos (1.3 months) are low.
Locally, the greater share of Martin 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 aggressively raised rates 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 from 3% in January to 6% in June. On the same $300,000 mortgage, the monthly payment has risen from $1265 in December to $1800 today, according to NAR.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.23% in May, up from 4.98% in April. 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.
Martin home prices haven’t begun to moderate because inventory is low. Also, one of the supports for home prices is rents and rents are rising strongly.
Martin County single-family home median prices increased 24.4% year-over-year in May 2022, increasing from $469,900 to $584,498. Existing condo median prices increased 27.4% year-over-year, from $227,500 to $289,900.
Total Active Listings Rise as More Supply Arrives to the Market
Total active listings at the end of May 2022 increased 17.9% year-over-year, from 406 to 479.
Inventory of single-family homes increased 23.6% year-over-year in May 2022 from 276 active listings last year to 341 last month. Condominium inventory increased 6.2% year-over-year to 138 from 130 listings during the same period in 2021.
New listings of Martin single-family homes increased 1.8% to 281 from 276. New listings of condominiums increased 18.3%, from 109 to 1,754.
Months’ supply of inventory for single-family homes increased by 54.5% to 1.7 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums decreased 18.2% to 1.3 months, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Nationally, total housing inventory at the end of May was 1,160,000 units, an increase of 12.6% from April and a 4.1% decline from the previous year (1.21 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, up from 2.2 months in April and 2.5 months in May 2021.
Martin Real Estate Had a $37 Million Local Economic Impact Just in May 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 $112,500, according to NAR. Martin County sold 329 homes in May 2022 and had a local economic impact of $37 million.
Martin total dollar volume totaled $258 million in May 2022. Single-family home dollar volume decreased 21.4% year-over-year, from $262 million to $206 million. Condo dollar volume increased 7.9% year-over-year, from $44 million to $47 million.
Martin Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 0.9% of all closed residential sales in Martin were distressed last month, including REO (bank-owned properties) and short sales, lower than the 0.9% in May 2021.
Total Martin distressed sales decreased 25% year-over-year in May 2022, from 4 to 3. Short sales and REOs accounted for 0% and 0.9% year-over-year, respectively, of total Martin sales in May 2022. Short sale transactions stayed even year-over-year while REOs decreased 25%.
Martin’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented less than 1% of sales in May 2022, unchanged from May 2021
Martin’s Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 28,861, down 6.9% year-over-year, while existing condo-townhouse sales totaled 13,265 down 14.4% over 15,491 in May 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, fell 3.4% from April to a seasonally adjusted annual rate of 5.41 million in May. Year-over-year, sales receded 8.6% (5.92 million in May 2021).
The statewide median sales price for single-family existing homes was $420,000 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 $322,000, up 28.8% 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 all housing types in May was $407,600, up 14.8% from May 2021 ($355,000), as prices increased in all regions. This marks 123 consecutive months of year-over-year increases, the longest-running streak on record.
Martin 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 May 2022, up 0.7% from 99.3% last year. The median percent of original list price received for existing condominiums was 100%, up 1% from 99% last year.
The median number of days between listing and contract dates for Martin single-family home sales was 11 days, down 8.3% from 12 days. The median time to sale for single-family homes was 51 days, a 13.6% decrease from 59 days last year.
The median number of days between the listing date and contract date for condos was 9 days, even with last year. The median number of days to sale for condos was 46 days, a 11.5% decrease from 52 days.
Martin Cash Sales Double the National Figure in May 2022
Cash sales represented 53.5% of Martin closed sales in May 2022, compared to 53.1% in May 2021. About 25% of U.S. home sales are made in cash, according to the latest NAR statistics.
Cash buyers are not deterred by rising rates.
The high percentage of cash buyers reflects South Florida’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 66.7% of all Palm Beach existing condo sales and 48.1% of single-family transactions.
To access May 2022 Martin 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
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