Miami property market boom not reflective of United States
Despite a new report detailing rising property prices within Miami's real estate market, the city's housing trends are not reflected throughout the rest of the United States. There remains a nationwide disparity between property prices in Miami and other cities such as New York, and the city also has the highest percentage of foreign property buyers in the country. However, residents of countries such as Brazil and Russia have become less active in the Miami property market due to factors in their home countries such as economic downturns and weakened currency values leaving them unwilling to speculate.
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Even with economic declines, stock market crashes and weakened currency conditions in Brazil, China and across Europe, Miami's residential property market continues to maintain pricing power this summer.According to the Miami Association of Realtors is reporting this week the Miami real estate market continued its strong momentum in the second quarter of 2015, as single-family home transactions increased year-over-year while all properties saw a rise in median sales prices.The median price for single-family homes in Miami increased to $271,000 in the second quarter, a 10.6 percent jump from $245,000 in the same period last year. The median price for condominiums increased 6.8 percent year-over-year from $190,000 to $203,000. Miami-Dade County has now seen 14 consecutive quarters (42 months) of price growth for single-family homes and condominiums."Home buyer and seller confidence in the Miami real estate market continues to result in more single-family home sales, higher median sales prices and active listings for all properties," said Christopher Zoller, the 2015 Residential President. "With mortgage rates at historic lows and Miami single-family home prices at 2004 levels, an increasing number of international and domestic home buyers are purchasing property in this world-class global city."The interest rate for a 30-year fixed-rate mortgage averaged 3.96 percent for 2Q 2015, according to Freddie Mac. That's down from the 4.23 percent average in the same quarter a year earlier.Despite the increase in median prices, Miami's residential properties remain more affordable than other global cities, according to the National Association of Realtors 2015 Profile of Home Buying Activity of International Clients. NAR analyzed the cost of a 120-square meter condo in a number of foreign cities based on prices reported in the Global Property Guide. A 120-square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average. The price for the same condo in London ($960,840), Hong Kong ($776,280), and New York ($1.6 million) were at least five times higher.Nationally, the median existing single-family home price in the second quarter was $229,400, up 8.2 percent from the second quarter of 2014 ($212,000), according to the National Association of Realtors. The national median existing-condo price was $217,400 in the second quarter, up 3.1 percent from the second quarter of 2014 ($210,800)Statewide, the median sales price for single-family existing homes in the second quarter was $200,000, up 11.1 percent from the same time a year ago, according to Florida Realtors. The Florida median price for condos during the quarter was $155,000, up 9.2 percent over the year-ago figure.Sales of single-family homes increased 7.2 percent to 3,913 in the second quarter, while condominium transactions decreased 1.8 percent to 4,409 compared with the same period in 2014. The existing condominium market, which posted its second-most sales in Miami history last year, continues to perform well despite a rise in pre-construction condo sales east of Interstate 95.The Miami market had 8,322 total residential sales in the second quarter of 2015, a 2.2 percent increase compared to the 8,139 sales in the second quarter of 2014.Nationally, total existing-home sales for single-family and condominiums increased 6.6 percent to a seasonally adjusted annual rate of 5.30 million in the second quarter from 4.97 million in the first quarter, and are 8.5 percent higher than the 4.89 million pace during the second quarter of 2014.Statewide, closed sales of existing single-family homes totaled 77,724 in 2Q 2015, up 15 percent over the 2Q 2014 figure. Florida's townhome-condo market totaled 33,183 during 2Q 2015, up 7.3 percent compared to 2Q 2014.Seller confidence in Miami's balanced housing market continued to expand in the second quarter. Miami saw a 0.1 percent increase in new listings for single-family homes, growing from 6,255 in the second quarter of 2014 to 6,264 in the second quarter of 2015. New listings for condominiums decreased by 1.2 percent year-over-year from 8,635 to 8,533.The Miami market had 17,740 active listings in the second quarter, a 3.8 percent increase from the 17,089 listings at the same time last year.At the current sales pace, the number of active listings represents 4.9 months of inventory for single-family homes and 8.9 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory. The inventory for single-family homes decreased 6.0 percent compared to the same period from last year. Compared to the second quarter of 2014, the months' supply of inventory for condominiums increased 14.2 percent.The median days on the market for single-family home listings during the second quarter was 44 compared to 43 a year ago, an increase of 2.3 percent. The median days on the market for condominiums was 59 compared to 56 last year, an increase of 5.4 percent.Miami has more than double the U.S. average of residential cash buyers. About 50.6 percent of closed sales in the second quarter of 2015 were all cash compared to 57.6 percent in the second quarter of 2014. In comparison, just 24 percent of U.S. home properties are made in cash, according to the most recent statistics from the National Association of Realtors.Statewide, cash sales represented 43.4 percent of all closed sales in the second quarter of 2015, down from 49.8 percent during the same period last year.Miami's existing condo market has more cash-only deals with a whopping 64.7 percent of all transactions made in cash. In the single-family sector, about 34.7 percent of all deals are made in cash.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. About 81 percent of international buyers in South Florida pay all-cash, compared to 60 percent of international buyers purchasing across the U.S., according to the 2014 Survey of International Home Purchases conducted by NAR for the Miami Association of Realtors.