Miami Housing Inventory Rises For First Time In 3 Years In May
The Miami Association of Realtors reports that this week Miami-Dade County real estate posted the 10th-highest month of total current home sales in history and the second-best May sales month ever.
“The rapid increase in mortgage rates, from an average of 3% to 6% over the past six months, is softening the historic pace of Miami real estate,” said Fernando Arencibia Jr., Chairman of MIAMI’s Board of Directors. said. “Although top selling scores are still being achieved, higher rates are starting to restore balance to the market. For the first time since July 2019, Miami single-family home inventory increased year-over-year. Less bidding wars, look for more days. cooling down.”
Second Best May Sales Month in History
Miami’s total closed sales in May 2022 outperformed nearly every May in history despite higher mortgage rates, lower supply and higher selling prices.
Miami’s May 2022 total home sales decreased year-over-year (3,198 in May 2022 and 3,536 in May 2021) but significantly outperformed every May except May 2021.
Miami’s existing home sales were down 7.9% year-on-year from a record 2,176 in May 2021 to 2005 in May 2022 due to a lack of inventory and rising mortgage rates. Single-family home sales were down 12.3% year-on-year from a record 1,360 in May 2021 to 1,193 in May 2022 due to a lack of inventory and rising mortgage rates.
The May 2021 sales total was very high as it took advantage of 3% mortgage rates, higher supply (especially in apartments) and demand driven by the pandemic.
Interest rates for many of the homes sold in May 2022 are set in March and April when mortgage rates are 5%. 2018 was the last time mortgage rates were at this level.
Housing is sensitive to rising mortgage rates. However, Miami May 2022 total home sales finished 21.9% higher than May 2018 (2,622 versus 3,198).
May 2022 total home sales ended as the 10th-highest month of total home sales in Miami-Dade County history. The highest 10 total sales months were achieved in the last two years. June 2021 remains #1 with 4,057 total home transactions in a single month.
Mid Market $400K-$600K Flat Sale Jump
Existing home sales in Miami, priced between $400,000 and $600,000, increased by 29.9% year-on-year to 426 transactions in May 2022. May 2022 due to lack of inventory.
Midrange home sales are on the rise because that’s where inventory is high. There is a 2.6-month supply for houses priced between 400 thousand and 600 thousand dollars. This is the third highest price range in supply, after $1 million plus (6.2 months supply) and $600k to $999,999 (3.9 months). Demand is so high that if Miami had more supply, it would have more sales.
Global buyers are also major home buyers. With the rise of global vaccines and unstable political situations around the world, South Florida is seeing an increase in foreign home buyers.
Vaccinated foreigners were allowed to continue their travel to the US in November 2021, leading to more international investment in South Florida, the #1 destination in the US for foreign buyers. Global buyers buy in Miami because Miami is a premium global city with better real estate prices than other similar global cities. Foreign buyers feel at home in our incredible diversity and acceptance of all cultures, with all our amenities.
Miami Luxury Apartment Sales Increase
Miami’s current sales of luxury condominiums ($1 million and above) increased 8.8% year-on-year in May 2022 to a record 322 transactions. Miami single-family luxury operations fell 5.1% year-on-year to 258 sales in May 2022 due to lower inventory.
Miami luxury condominiums have a 6.2-month supply inventory, which is a harbinger of further growth in the industry given the high demand. Luxury detached homes have a monthly supply of 4.8.
Home buyers leaving tax-ridden states in Florida to buy (no state income tax), new entrants moving there, low interest rates, attractiveness of property as a hedge against inflation, rising wages and savings accrued in quarantines, strong stock market performance, reassessment of housing needs and lifestyles due to the pandemic, and the proliferation of remote work are all factors driving South Florida real estate demand.
Rising Mortgage Rates Will Finally Slow National Price Growth In Miami
House prices are determined by supply and demand. Lower supply and higher demand create higher prices. Miami real estate demand is at an all-time high. Inventory is low for Miami single-family homes (2.2 months) and apartments (2.5 months).
Locally, the larger share of Miami luxury sales is part of the reason for the large year-over-year increase in median prices.
To combat national inflation, the Federal Reserve has aggressively raised rates this year and has plans for further increases. High inflation and the Fed’s tightening policy are the main factors behind rising mortgage rates.
Mortgage rates rose from 3% in January to 6% in June. On the same $300,000 mortgage, the monthly payment has increased from $1265 in December to $1800 today, according to NAR.
According to Freddie Mac, the average commitment rate for a traditional 30-year fixed-rate mortgage rose from 4.98% in April to 5.23% in May. The average commitment rate for the whole of 2021 was 2.96%.
According to NAR, the mortgage rate is expected to decrease to 5.3% by 4Q 2022. This is still low compared to the all-time average of about 8% in the US.
In the long run, the hope that higher rates will result in more days in the market (giving buyers more options). Higher rates will eventually lead to a moderation in the pricing growth rate. With the growth rate of refrigeration pricing, total inventory can then grow. Historically, stocks expand six months after rates rise, but today’s market is unlike any other.
Miami home prices haven’t started to moderate as inventory is low. In addition, one of the supports to house prices is rents and rents are increasing rapidly.
Miami-Dade County single-family home prices rose 15% year-on-year from $500,000 to $575,000 in May 2022. Single family median prices in Miami rose 126 consecutive months (10.5 years), making it the longest series on record. Median prices for current condos rose 27.7% year-over-year from $325,000 to $415,000. Housing median prices have increased in 128 of the last 132 months.
Single Family Home Inventory Rises For First Time Since July 2019
Inventory of single-family homes increased 0.2% year-on-year to 2,790 last month from 2,784 active listings last year in May 2022. Condominium inventory decreased 43.8% year-on-year to 5,024 from 8,946 listings in the same period of 2021.
New listings for single-family homes in Miami fell 0.7% to 1,813 from 1,826. New condominium listings fell 3% from 2,598 to 2,521.
The monthly supply of inventory for single-family homes even stayed at 2.2 months from year to year, showing a seller’s market. Existing condominium inventory is down 58.3% to 2.5 months, indicating a seller’s market. A balanced market between buyers and sellers offers six to nine months of supply.
Total active listings at the end of May 2022 fell 33% from 11,730 to 7,814, down from last year.
Nationally, the total housing stock at the end of May was 1,160,000 units, up 12.6% from April and down 4.1% from the previous year (1.21 million). Unsold inventory is at a current sales rate of 2.2 months in April and 2.6 months from 2.5 months in May 2021.
Miami Property Had $359.8M Local Economic Impact In May 2022 Only
Every time a home is sold, it affects the economy: income from real estate industries (commissions, fees, and moving expenses), expenses related to buying the home (furniture and renovation expenses), multiplier of housing-related expenses (result earned income) selling a home is recirculated into the economy ) and new construction (additional home sales result in additional home production).
According to NAR, the total economic impact of a typical Florida home sale is $112,500. Miami-Dade County sold 3,198 homes in May 2022, with a local economic impact of $359.8 million.
Miami’s total dollar volume reached $2.81 billion in May 2022. Single-family household dollar volume fell 8.31% year-on-year from $1.4 billion to $1.3 billion. Flat dollar volume increased 3% from $1.47 billion to $1.51 billion compared to the same period last year.
Miami Troubled Sales Continue to Drop, Reflects Healthy Market
Only 1.2% of all indoor home sales in Miami last month, including REO (bank-owned properties) and open sales, were lower than 1.7% in May 2021. In 2009, troubled sales accounted for 70% of Miami sales.
Total Miami distressed sales fell 35% year-on-year from 60 to 39 in May 2022. Short sales and REOs accounted for 0.5% and 0.8% year-on-year, respectively, of total Miami sales in May 2022. transactions decreased 44.2% year-on-year, while REOs decreased 11.8%.
Miami’s distressed sales percentage is on par with the national figure. Nationally, distressed sales represented less than 1% of sales in May 2022 and were unchanged from May 2021.
Miami’s Percentage of Sales Continues to Outperform the Country, the State
In Florida, indoor sales of single-family homes fell 6.9% year-on-year to 28,861, while existing apartment sales fell 14.4% to 13,265, down from 15,491 in May 2021. Closed sales can range from 30 to 90. plus days after sales contracts are written.
Nationally, total existing home sales transactions, which include single-family homes, townhomes, condominiums, and cooperatives, were down 3.4% from April to a seasonally adjusted annual rate of 5.41 million in May. Sales were down 8.6% year-over-year (5.92 million in May 2021).
The statewide median selling price of single-family existing homes was $420,000, up 21.8% from the previous year, according to data from the Florida Department of Realtors Research in partnership with local Realtors boards/associations. Last month’s statewide median price for condo-townhouse units was $322,000, up 28.8% from the previous year. The median is the midpoint; Half of the houses were sold for more, half for less.
Nationally, the median available home price of all housing types in May was $407,600, up 14.8% ($355,000) from May 2021 as prices increased in all regions. This marks the longest streak on record, up 123 consecutive months from the previous year.
Miami Properties Attract Multiple Offers, Buyers Exceed List Price
The median percentage of the original list price charged for single-family homes was 100% in May 2022, up 1.3% from 98.7% last year. The median percentage of original list price charged for existing condominium was 100%, up 4.4% from 95.8% last year.
The median number of days between listing and contract dates for Miami family home sales was 14 days, down 22.2% from 18 days last year. Average sales time for single-family homes was 58 days, down 13.4% from 67 days last year.
The median number of days between listing date and contract date for apartments was 21 days, down 57.1% from 49 days. The median number of days of flat sales was 67 days, down 28.7% from 94 days.
Miami Cash Sales 77.6% More Than National Number in May 2022
Cash sales represented 44.4% of closed sales in Miami in May 2022, compared to 38.9% in May 2021. According to the latest NAR statistics, about 25% of US home sales are made in cash.
Cash buyers are not deterred by rising rates.
The high percentage of cash buyers reflects Miami’s top position as the leading American real estate market for foreign buyers who tend to buy with all cash and move from the more expensive US markets, some of which can buy more with profits from real estate sales.
Cash sales accounted for 52.7% of all existing home sales and 30.4% of single-family transactions in Miami.