By Gay Cororaton, MIAMI REALTORS Chief Economist
Amid rising mortgage rates and sustained migration from asset and income-rich out-of-state buyers, Southeast Florida has seen a higher share of cash buyers compared to the pre-pandemic level in 2019. Cash sales made up half of $1 million or over condo/townhome sales where supply is more available to meet the demand for high-end properties and where the effect of higher mortgage rates is not as significant as the impact in the lower market segment.
In Miami-Dade County, cash sales made up 28% of single-family home sales in August (18% on August 29). Martin County has the highest share of cash sales in the single-family homes market at 45% (33% in August 2019), followed by Palm Beach at 43% (29% in August 2019). Broward had the lowest share of cash sales at 25% (16% in August 2019).
In the condo/townhome market, cash sales made up over half of sales, led by Martin County at 61% (63% in August 2019), followed by Palm Beach at 56% (53% in August 2019), Miami-Dade at 50% (45% in August 2019) and Broward at 50% (47% in August 2019). There was a dip in the cash sales share relative to August 2022 in Palm Beach (57%) and in Broward (54%), but cash buyers still make up at least half of all buyers in all the four counties.
Cash buyers account for half of all $1 M or more sales
The role of wealthy homebuyers in Southeast Florida’s home market is evident in the sales of condo/town homes priced at $1 million or over, with cash buyers accounting for over half of all sales, led by Palm Beach buyers at 84% (78% in August 2019), Miami-Dade at 72% ( 67% in August 2019) and lastly among Broward buyers at 69% (62% in August 2019). (No cash sales were recorded for condo/townhome sales in Martin, which is predominantly a single-family market)
In the single-family homes market cash buyers also accounted for over half of sales in Martin, Palm Beach, and Miami-Dade. Martin County had the highest share of cash sales at 71% ( 67% in August 2019) followed by Palm Beach at 65% (45% in August 2019) , Miami-Dade at 51% (44% in August 2019). Only Broward County had a decline in the cash sales share and at below half of $1 million or over sales, at 37% (44% in August 2019).
$1M or over home sales account for about 1 in 5 sales
With the demand from high-end buyers and tighter supply of homes for homes below $1 Million, with less than 6 months’ supply, more transactions are occurring at the $1M or more price segment.
In Miami-Dade, single-family homes priced at $1 million or more made up 20% of sales (7% in August 2019), 21% in Palm Beach (7% in August 2019), 21% in Martin (3% in August 2019), and 16% in Broward (4% in 2019).
Demand is strong across all price segments, but supply is more available for homes in the $1M or more market[1] , possibly because homeowners are holding on to their low-cost mortgages or choosing to rent out rather than sell their single-family home to keep the home equity gain and the rental cash flow. MIAMI Realtors® analysis of RentalBeast data shows a rising share of single-family rentals, to 36% of total rental listings as of August 2023 from 32% one year ago.[2]
Sustained migration from wealthy out-of-state and international buyers
Southeast Florida’s cash buyers are likely those who have moved from out-of-state or abroad with the financial wealth to pay for a home purchase in cash. Based on MIAMI Realtors® analysis of IRS migration data[3], the average adjusted gross income among households who moved into Miami-Dade was $229,300; in Broward, $102,600; in Palm Beach, $242,200; and in Martin County, $167,800.
Meanwhile, driver license exchange[4] as of the first half of 2023 in the counties of Miami-Dade, Broward, Palm Beach, and Martin rose 18% to 82,302 from the same period in 2022. The increase is due to the number of foreign driver license exchanges which rose 54% to 45,214 in the first half of 2023. About 42% of out-of-state driver license exchanges in the counties of Miami-Dade, Broward, Palm Beach, and Martin in the first half of 2023 were from New York (24%), New Jersey (10%), and California (8%).
Miami-Dade County’s population increased year-over-year in 2022 by 3,416, according to MIAMI Realtors® analysis[5] of U.S. Census Bureau population estimates with the normalization of international travel and lower net domestic outmigration in 2022. Miami-Dade is one of only 11 counties in the U.S. that are back to positive population growth in 2021-2022 after pandemic-driven population declines impacted the entire country, according to a new Brookings Institute[6] report that studied 38 select counties.
[1] Months’ supply of homes $1 million or more is over 6 months though supply is also relatively tighter compared to pre-pandemic conditions where month’s supply was over 12 months
[2] Pent-Up Demand for Homeownership Bolsters Single-family Rentals – MIAMI REALTORS®
[3] In-Migration Boosted South Florida Household Income by $16 Billion in 2021 – MIAMI REALTORS®
[4] South Florida Driver License Exchanges Rose 18% in 2023 Due to International Migration – MIAMI REALTORS®
[5] Miami-Dade’s Population Grows in 2022 As International Migration Rises Above 2019 Figure – MIAMI REALTORS®
[6] https://www.brookings.edu/articles/pandemic-driven-population-declines-in-large-urban-areas-are-slowing-or-reversing-latest-census-data-shows/
