Miami-Dade County real estate posted its best May sales month in history as pent-up demand, more U.S. individuals and companies moving to South Florida, and record-low mortgage rates fueled a triple-digit sales increase, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
MIAMI, June 22, 2021 /PRNewswire-PRWeb/ -- Miami-Dade County real estate posted its best May sales month in history as pent-up demand, more U.S. individuals and companies moving to South Florida, and record-low mortgage rates fueled a triple-digit sales increase, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Miami-Dade County total home sales surged 172.6% year-over-year, from 1,297 to 3,536. Miami single-family home transactions rose 85.3%, from 734 to 1,360. Miami existing condo sales increased 286.5%, from 563 to 2,176.
This is the best May selling month since MIAMI began tracking stats in 1993. The next best May occurred in May 2014 when Miami-Dade County had 2,704 total home sales, or 832 fewer than May 2021. Miami total home sales are up 26.5% in May 2021 vs. May 2019, from 2,796 to 3,536. Miami single-family home sales (0.4% increase) and condo transactions (51% jump) are higher than May 2019.
"Miami's condo market continues to be driven by U.S. buyers, particularly from tax-burdened states, moving to South Florida," MIAMI Chairman of the Board Jennifer Wollmann said. "While other major cities are struggling with inventory, Miami's condo market has healthy inventory with six months of overall condo supply. Domestic wealth migration, pent-up demand from international buyers, and record-low mortgage rates continue to fuel Miami real estate."
Lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply. More inventory is expected to come to the market later this year as potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
Miami Luxury Sales Jump as Northeast and West Coast Buyers Move to Mega Region
Miami single-family luxury ($1-million-and-up) transactions jumped 306% year-over-year to 272 sales in May 2021. Miami existing condo luxury ($1-million-and-up) sales increased 886.7% year-over-year to 296 transactions.
Comparing the May 2021 luxury stats to May 2019 also shows major gains. Miami single-family luxury sales surged 177.6% from May 2019 to May 2021. Miami condo luxury transactions jumped 236.4% from May 2019 to May 2021.
There are 13.7 months of supply in luxury condos.
Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
Low interest rates; a robust S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
Miami single-family homes priced between $400K to $600K surged 190.7% year-over-year to 468 transactions in May 2021. Miami existing condo sales priced between $400K to $600K increased 475.4% to 328 transactions.
Miami Homeowners' Home Equity Continues Surging as Many Pay Lower Mortgage Payments
With interest rates still at record lows, many South Florida homeowners have refinanced their home loans. So not only are many homeowners paying lower mortgage payments today; they are doing so while their wealth (home equity) has significantly increased. Home equity can be tapped for renovations, college loans and more.
Miami-Dade County single-family median prices increased 33.1% year-over-year in May 2021, increasing from $375,714 to $500,000. Miami single-family median prices have risen for 114 consecutive months, a streak of 9.5 years. Existing condo median prices increased 25% year-over-year, from $260,000 to $325,000. Condo median prices have increased or stayed even in 116 of the last 120 months.
The greater share of Miami luxury sales in 2021 compared to a year ago is part of the reason for the large year-over-year increase in median prices.
Rising median prices is a trend nationwide as record-low mortgages rates and the increased availability of remote work and education has accelerated the demand for housing. Low inventory relative to high demand leads to prices rising.
Lower mortgage rates are making home purchases more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.96% in May, down from 3.06% in April. The average commitment rate across all of 2020 was 3.11%. Yun expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021, the increased inventory should ease the growth of median prices.
Miami remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 85 square meters of prime property, according to Knight Frank's 2021 The Wealth Report. Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35) and others offer significantly less prime land for $1 million.
Miami Dollar Volume Totals $2.9 Billion, Showcasing Impact Housing Plays in Local Economy
While other industries struggled over the past year, housing lifted the economy nationally and locally. For every two homes sold in the U.S., one job is created. Miami dollar volume showcases the impact housing plays in the local economy.
Single-family home dollar volume increased 254.7% year-over-year, from $400.3 million to $1.4 billion. Condo dollar volume increased 535.5% year-over-year, from $231.7 million to $1.5 billion.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Only nine of the 1,909 condominium buildings in Miami-Dade, Broward and Palm Beach counties are approved for Federal Housing Administration loans as of June 21, 2021, according to the U.S. Department of Housing and Urban Development.
A better condo approval process is expected to increase sales. The guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR have championed, are expected to generate increased homeownership opportunities.
Miami Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 1.7% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 5.7% in May 2020. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 18.9%, from 74 to 60.
Short sales and REOs accounted for 0.5% and 1.2% year-over-year, respectively, of total Miami sales in May 2021. Short sale transactions decreased 13.3% year-over-year while REOs decreased 27.1%.
Nationally, distressed sales represented less than 1% of sales in May 2021, down from 3% in May 2020.
National, State Housing Demand Robust as More Inventory Expected to Arrive
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 0.9% from April to a seasonally-adjusted annual rate of 5.80 million in May. Sales in total climbed year-over-year, up 44.6% from a year ago (4.01 million in May 2020).
Statewide, closed sales of single-family homes in May totaled 30,985, up 57.9% year-over-year, while existing condo-townhouse sales totaled 15,491, up 155.2% over May 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, the median existing-home price for all housing types in May was $350,300, up 23.6% from May 2020 ($283,500), as every region registered price increases. This is a record high and marks 111 straight months of year-over-year gains since March 2012.
The statewide median sales price for single-family existing homes was $344,900, up 27.7% 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 $250,000, up 24.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Homebuyers Targeting Miami Existing Condos: 3 Times More Inventory than Single-Family
Inventory of single-family homes decreased 50.7% in May 2021 from 5,665 active listings last year to 2,794 last month. Condominium inventory decreased 39% to 8,964 from 14,705 listings during the same period in 2020.
Inventory of active listings has decreased the last 21 months for single-family homes.
Months supply of inventory for single-family homes decreased 59.3% to 2.2 months, which indicates a seller's market. Inventory for existing condominiums decreased 56.5% to 6 months, which indicates a balanced market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Months supply of inventory is down since July 2019 for single-family, reflecting strong demand.
Total active listings at the end of May 2021 decreased 42.3% year-over-year, from 20,370 to 11,758.
New listings of Miami single-family homes increased 17.1% to 1,826 from 1,559. New listings of condominiums increased 20.3%, from 2,160 to 2,598.
Nationally, total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April's inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April's 2.4-month supply but down from 4.6-months in May 2020.
Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 98.7% in May 2021, up 3.2% from 95.6% last year. The median percent of original list price received for existing condominiums was 95.8%, up 3.1% from 92.9% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 18 days, a 59.1% decrease from 44 days last year. The median time to sale for single-family homes was 67 days, a 25.6% decrease from 90 days last year.
The median number of days between the listing date and closing date for condos was 49 days, down 18.3% from 60 days. The median number of days to sale for condos was 94 days, a 13.8% decrease from 109 days.
Miami Cash Sales 69.1% More than National Figure: Miami Top Market for Global Buyers
Cash sales represented 38.9% of Miami closed sales in May 2021, compared to 25.9% in May 2020. About 23 percent 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 48.3% of all Miami existing condo sales and 23.9% of single-family transactions.
To access May 2021 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 was chartered by the National Association of Realtors in 1920 and is celebrating 101 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward-MIAMI Association of Realtors, the Jupiter Tequesta Hobe Sound (JTHS-MIAMI) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents 52,000 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 223 international organizations worldwide. MIAMI's official website is http://www.MiamiRealtors.com
Chris Umpierre, MIAMI Association of Realtors, 3054687047, email@example.com
SOURCE MIAMI Association of Realtors