Economic Uncertainty, Rising Rates Hobbling Greater Miami Residential Sales in June
Both Miami home sales drop 26 percent annually, condo sales down 30 percent annually mid-summer
Growing economic uncertainty and rising interest rates in the U.S. are now impacting Miami’s housing market mid-summer 2022.
According to Miami Realtors, Miami-Dade County 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’s existing condo sales also 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.
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.
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 recirculated 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 Dip
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 of 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 sell 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.
