Demand and lack of supply pushing up home sales and prices in Miami

Intense demand for family homes in Miami has resulted in sales and prices surging, especially in the lower prices ranges where there is a lack of supply, according to real estate agents.

Single family home sales surged 25% from 935 in June 2012 to 1,170 last month and condominium sales increased 5.5%, up from 1,421 in June 2012 compared to 1,499 last month, the latest data from the Miami Association of Realtors shows.

June’s real estate market performance marks 19 consecutive months of appreciation for both single family homes and condominiums.

The data also shows that the median sales price of single family homes increased 21.1% to $230,000 year on year and 3.6% compared to the previous month. The median sales price of condominiums, which has significantly increased each month over the last two years, rose 15.9% to $185,500 compared to a year earlier and 3.1% compared to the previous month.

‘The Miami real estate market continues to gain momentum fuelled by intense demand coupled with very tight supply particularly in the lower price ranges due to investors,’ said Natascha Tello, chairman of the board of the Miami Association of Realtors.

‘Miami real estate is definitely thriving. Factors such as population growth and foreign buyers are driving record sales for the third consecutive year, which will continue to result in strong price appreciation until more supply comes on the market,’ she added.

Nationally, sales of existing single family homes, town homes, condominiums, and co-ops decreased 1.2% from May but were 15.2% higher than they were in June 2012, according to the National Association of Realtors.

Compared to last year’s figures, the average sales price for single family homes in Miami-Dade County in June increased 27.1% to $509,515, while the average sales price for condominiums increased 9.9% to $351,608.

Active listings at the end of June increased 5.1% from 12,544 to 13,179, compared to June 2012, when the market was already experiencing a housing shortage. Despite the slight increase due to more new listings coming on the market, current active inventory remains insufficient to satisfy intense demand for Miami properties.

Inventory of single family homes decreased 2.8% to 5,006 active listings, while that of condominiums increased 10.5% to 8,173 active listings. At the current sales pace, there is 4.9 months of supply of single family homes and 5.8 months of supply of condominiums in Miami-Dade, representing a decrease of 15.6% and an increase of 2.8% respectively compared to year ago levels.

‘Limited months supply of inventory in Miami reflects a seller’s market, which means buyers have to be more focused and savvy while sellers can sell fast if properties are priced right,’ explained Fernando Martinez, residential president of the Miami Association of Realtors.

‘Properties that are competitively priced will sell very rapidly, particularly in the lower price points, and will generate multiple offers close to or above asking price,’ he added.

Sales of distressed properties continue to sharply decline in Miami-Dade County, as prices for both REOs and short sales also rose significantly. In June, only 36.7% of all closed residential sales in Miami-Dade County were distressed, including REOs (bank-owned properties) and short sales, compared to 44.4% in June 2012.

The median sales price of single-family home and condominium foreclosures in Miami-Dade increased 9.7% to $141,500 and 29% to $116,100 respectively.

In Miami-Dade County, some 60% of total closed sales in June were all cash sales compared to 65% in June 2012. All cash sales accounted for 42.2% of single family homes and 73.8% of condominium sales compared to a year ago when cash sales were 46.1% and 77.4% respectively.

Since nearly 90% of foreign buyers in Florida purchase properties all cash, this reflects the much stronger presence of international buyers in the Miami real estate market.