Miami-Dade County real estate posted its third-best June sales month in history as more inventory, particularly in single-family homes, returns to the high-demand, low-supply market, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
MIAMI, July 20, 2022 /PRNewswire-PRWeb/ -- Miami-Dade County real estate posted its third-best June sales month in history as more inventory, particularly in single-family homes, returns to the high-demand, low-supply market, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
"Miami real estate outperformed nearly every other June in history despite higher mortgage rates, lower supply and higher sale prices," MIAMI Chairman of the Board Fernando Arencibia Jr. said. "Demand from individuals and companies from high-tax, high-density areas remain high as highlighted by renowned hedge fund Citadel's recent announcement to move its HQ from Chicago to Miami. An important metric to watch is inventory as Miami active listings have come off record-lows and are trending up, bringing more options for buyers."
Third-Best June Sales Month in Miami-Dade History
Miami's June 2022 total home sales decreased year-over-year when compared to the all-time, record-breaking sales month of June 2021 (2,891 vs. 4,057) but outperformed nearly every June in Miami history.
Even with the rapid rise of mortgage rates, from an average of 3% to 6% in six months, June 2022 total sales (2,891 transactions) finished as the third-best June sales month in Miami history and topped Miami's historical June sales average (2,747 transactions).
Beating its historical June sales average with rising rates and low inventory illustrates the depth of demand for Miami real estate. Local demand remains fueled by U.S. individuals and companies moving to South Florida, surging demand from global buyers, demographic shifts with rising millennial homebuyer and senior populations, high percentage of workforce still working remotely, surging rental prices and more.
Single-family home sales decreased 26.1% year-over-year, from 1,542 in all-time, record-breaking June 2021 to 1,139 in June 2022, due to lack of inventory and rising mortgage rates.
Miami existing condo sales decreased 30.3% year-over-year, from 2,515 in all-time, record-breaking June 2021 to 1,752 in June 2022, due to lack of inventory and rising mortgage rates.
In June 2021, Miami sales surged to a record-high because of 3% mortgage rates, higher supply (particularly in condos) and pandemic-driven demand.
In June 2022, Miami sales were impacted by higher rates of 5-6% when contracts were established in April and May and lower inventory.
Housing is sensitive to rising mortgage rates. 2018 marked the last time mortgage rates hit 5%. Nevertheless, Miami June 2022 total home sales finished 11.4% higher than June 2018 (2,891 vs. 2,594).
Mid-Market $400K-$600K Condo Sales Increase in June 2022
Miami existing condo sales priced between $400K to $600K increased 5.1% year-over-year to 416 transactions in June 2022. Miami single-family homes priced between $400K to $600K decreased 22.7% year-over-year to 430 transactions in June 2022, due to lack of inventory.
Mid-market condo sales are increasing because that's where the higher inventory is. There are 3.2 months of supply for condos priced between $400K to $600K. That's the third-highest price range in supply, following $1M plus (7.0 months of supply) and $600K to $999,999 (4.5 months). Demand is so high that if Miami had more supply, it would have more sales.
Global buyers are also major condo buyers. 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.
South Florida: A Bargain in Comparison to Other Global Cities & U.S. Metros
Miami-Fort Lauderdale-West Palm Beach's price per square meter is $3,170, far below at least 30 global cities and 13+ U.S. Metros including markets such as Hong Kong ($28,570), New York City ($17,191), San Francisco-Oakland-Hayward, CA ($8,250), Madrid, Spain ($6,173), Los Angeles-Long Beach-Glendale, CA ($4,740) and Seattle-Tacoma-Bellevue, WA ($4,460), according to National Association of REALTORS Profile of International Transactions in U.S. Residential Real Estate 2022.
Miami-Dade County single-family home median prices increased 15.8% year-over-year in June 2022, increasing from $500,000 to $579,000. Miami single-family median prices have risen for 127 consecutive months (10.6 years), the longest running-streak on record. Existing condo median prices increased 20.6% year-over-year, from $340,000 to $410,000. Condo median prices have increased in 129 of the last 133 months.
While median prices have increased nationally so has house-buying power because of a long-run decline in rates before March 2022 and the slow, but steady growth of household income. The First American Real House Price Index (RHPI) measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time and across the United States. According to the latest RHPI, Miami remains more than 20% under its RHPI peak.
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 (2.8 months) and condos (2.9 months) are low. Also, one of the supports for home prices is rents and rents are rising strongly.
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 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 near 6% in July. On the same $300,000 mortgage, the monthly payment has risen from $1,265 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 5.52% in June, up from 5.23% in May. 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.
Single-Family Home Inventory Rises Year-over-Year for Second Consecutive Month
Inventory of single-family homes increased 19.9% year-over-year in June 2022 from 2,853 active listings last year to 3,422 last month. Condominium inventory decreased 30.8% year-over-year to 5,817 from 8,409 listings during the same period in 2021.
New listings of Miami single-family homes increased 7.8% to 1,939 from 1,798. New listings of condominiums decreased 5.1%, from 2,772 to 2,630.
Months' supply of inventory for single-family homes increased 27.3% to 2.8 months year-over-year, which indicates a seller's market. Inventory for existing condominiums decreased 43.1% to 2.9 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 June 2022 decreased 17.9% year-over-year, from 11,262 to 9,239.
Nationally, total housing inventory at the end of June was 1,260,000 units, an increase of 9.6% from May and a 2.4% rise from the previous year (1.23 million). Unsold inventory sits at a 3.0-month supply at the current sales pace, up from 2.6 months in May and 2.5 months in June 2021.
Miami Real Estate Posts $325.2 Million Local Economic Impact Just in June 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. Miami-Dade County sold 2,891 homes in June 2022 and had a local economic impact of $325.2 million.
Miami total dollar volume totaled $2.5 billion in June 2022. Single-family home dollar volume decreased 17.4% year-over-year, from $1.5 billion to $1.2 billion. Condo dollar volume decreased 19.8% year-over-year, from $1.6 billion to $1.3 billion.
Miami Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 1.9% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 1.5% in June 2021. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 12.9% year-over-year in June 2022, from 62 to 54. Short sales and REOs accounted for 0.4% and 1.5% year-over-year, respectively, of total Miami sales in June 2022. Short sale transactions decreased 50% year-over-year while REOs increased 7.5%.
Miami's percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented less than 1% of sales in June, essentially unchanged from May 2022 and June 2021.
Miami's Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 28,296, down 17.2% year-over-year, while existing condo-townhouse sales totaled 11,796 down 27% over 15,491 in June 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, dipped 5.4% from May to a seasonally adjusted annual rate of 5.12 million in June. Year-over-year, sales fell 14.2% (5.97 million in June 2021).
The statewide median sales price for single-family existing homes was $420,000 up 19.7% 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 $324,900, up 26.4% 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 June was $416,000, up 13.4% from June 2021 ($366,900), as prices increased in all regions. This marks 124 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 June 2022, up 0.6% from 99.4% last year. The median percent of original list price received for existing condominiums was 99.8%, up 3.5% from 96.4 % last year.
The median number of days between listing and contract dates for Miami single-family home sales was 15 days, a 7.1% increase from 14 days last year. The median time to sale for single-family homes was 60 days, a 4.8% decrease from 63 days last year.
The median number of days between the listing date and contract date for condos was 22 days, down 56.9% from 51 days. The median number of days to sale for condos was 67 days, a 30.2% decrease from 96 days.
Miami Cash Sales 75.6% More than National Figure in June 2022
Cash sales represented 43.9% of Miami closed sales in June 2022, compared to 40.5% in June 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 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 52.8% of all Miami existing condo sales and 30.2% of single-family transactions.
To access June 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 230 international organizations worldwide. MIAMI REALTORS has launched its new YPN Global and will host the first-ever YPN Global Congress in early 2023 in Dubai. MIAMI has been selected to host the prestigious FIABCI World Congress on June 5-9, 2023. MIAMI's official website is http://www.MiamiRealtors.com
Chris Umpierre, MIAMI Association of Realtors, 3054687047, firstname.lastname@example.org
SOURCE MIAMI Association of Realtors