Despite Slowing Housing Market in 2022, Miami Enjoyed Second Best Year in History
According to the Miami Association of Realtors, Miami-Dade County’s real estate market sold 31,627 total homes (or 86 transactions per day) in 2022. That’s the second all-time sales rate in Miami-Dade County history, behind only the 39,394 homes sold in 2021.
The Miami condo market played a significant role in the annual total sales figure as Miami had its second-biggest condo sales year ever in 2022. Miami sold 19,377 condos in 2022, second only to the historic 2021 campaign (23,689 condo transactions). Miami registered 12,250 single-family home sales in 2022.
When looking at monthly sales, Miami December 2022 sales decreased 48.2% year-over-year, from 3,433 to 1,779. Transactions decreased because it is in comparison to a record December 2021, today’s mortgage rates have doubled vs. 12 months ago and the market has low inventory in specific price points.
While overall inventory is on the rise, most of the growth in listings is at the top end or luxury segment of the market. Miami single-family inventory in the $400K to $600K price range, for example, is at 2.6 months of supply, well below a balanced market (6 months).
In fact, Miami-Dade active listings are still down 49% versus pre-pandemic numbers (year-end 2022 vs year-end 2019).
Single-family home sales decreased 45.1% year-over-year, from 1,356 in record-breaking December 2021 to 744 in December 2022, due to lack of inventory and rising mortgage rates. Miami existing condo sales decreased 50.2% year-over-year, from 2,077 record-breaking December 2021 to 1,035 in December 2022, due to lack of inventory and rising mortgage rates.
December 2021 sales surged so high because of historic-low mortgage rates and pandemic-fueled homebuying. Mortgage rates averaged near 3% in December 2021.
Miami-Dade County single-family home median prices increased 1.1% year-over-year in December 2022, increasing from $525,000 to $530,900. Miami single-family median prices have risen for 133 consecutive months (11+ years), the longest running-streak on record. Existing condo median prices increased 5.5% year-over-year, from $355,000 to $374,500. Condo median prices have increased in 134 of the last 139 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. West Palm Beach (No. 5) and Miami (No. 6) ranked among the Top-10 U.S. metros where homebuyer income grew the most during the pandemic via a Redfin report.
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Inventory for Miami single-family homes (4 months) and condos (4.1 months) are low. Also, one of the supports for home prices is rents and rents are up.
Locally, the greater share of Miami luxury sales is also part of the reason for the large year-over-year increase in median prices.
Total active listings at the end of December 2022 increased 18.9% year-over-year, from 8,997 to 10,706.
Inventory of single-family homes increased 57.7% year-over-year in December 2022 from 2,563 active listings last year to 4,043 last month. Condominium inventory increased 3.6% year-over-year to 6,663 from 6,434 listings during the same period in 2021.
New listings of Miami single-family homes decreased 20.1% to 914 from 1,144. New listings of condominiums decreased 22.2%, from 1,809 to 1,407.
Months’ supply of inventory for single-family homes increased 100% to 4 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums increased 24.2% to 4.1 months, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Only 1.2% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 1% in December 2021. In 2009, distressed sales comprised 70% of Miami sales.
Short sales and REOs accounted for 0.2% and 1% year-over-year, respectively, of total Miami sales in December 2022.
Miami’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented approximately 1% of sales in December, virtually unchanged from one year ago.
The median percent of original list price received for single-family homes was 95.2% in December 2022, down 3.5% from 98.7% last year. The median percent of original list price received for existing condominiums was 96%, down 1.3% from 97.3% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 35 days, up from 19 days last year. The median time to sale for single-family homes was 77 days, a 16.7% increase from 66 days last year.
The median number of days between the listing date and contract date for condos was 34 days, down 5.6% from 36 days. The median number of days to sale for condos was 73 days, a 8.8% decrease from 80 days.
Cash sales represented 42.4% of Miami closed sales in December 2022, compared to 40.3% in December 2021. About 28% 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 54.6% of all Miami existing condo sales and 25.5% of single-family transactions.
