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Inbound Northeast, California Buyers Lifting the Local Market in 2021
According to the Miami Association of Realtors, Miami-Dade County continues to break home sales records, registering its best September sales month in history and establishing a new mark for the most annual total Miami condo transactions in only nine months. Yet, there are still three more months of 2021 statistics left to tabulate to set the condo record even higher.
Miami-Dade County total home sales surged 20.2% year-over-year in September 2021, from 2,521 sales to 3,031. Miami single-family home transactions decreased 3.6%, from 1,288 to 1,241 because of lack of inventory. Miami existing condo sales increased 45.2%, from 1,233 to 1,790.
Year-to-date, Miami has registered 17,942 existing condo sales in nine months, which surpasses the previous annual record of 17,142 condo transactions in the entire year of 2013.
“Miami condo sales make history as Miami real estate has now posted record sales months in each of the last seven months,” Miami Realtor’s Chairman of the Board Jennifer Wollmann said. “Domestic homebuyers and companies relocating from high-tax, high-density states have fueled this historic 2021 as Covid-19 travel restrictions have limited the robust impact of international buyers. But now that vaccinated foreigners will be allowed to resume travel to the U.S. in November, international homebuying is expected to surge in South Florida — the No. 1 destination for global homebuyers.”
Miami will surpass its best year ever for total sales next month. Miami is also on pace to have its best year ever for single-family home transactions. Miami real estate has already recorded more total sales in nine months this year (29,962) vs. 2020 (26,345) and 2019 (27,436). Miami’s total sales record is 30,041, set in 2013.
Of the top-10 best home sales months in Miami history, seven have happened this year. June 2021 (with its 4,057 total transactions) remains the No. 1 overall sales month in Miami history. September 2021 (with its 3,031 sales) ranks as the seventh-best sales month overall since MIAMI began tracking stats in 1993.
Miami home sales are also significantly higher vs. September 2019. Miami home sales are up 35.3% in September 2021 vs. September 2019, from 2,240 to 3,031. Miami single-family home sales (14.9% increase) and condo transactions (54.3% jump) are higher than September 2019.
Demand for Miami Condos Surges; Condo Sales Jump 45.2% Year-over-Year in September
Nearly every week brings another announcement of a major U.S. company either moving their headquarters to Miami or opening offices here. Recently, Seattle-based Microsoft announced its plans to open a regional hub and Latin American offices in Miami. International companies are also showing interest in opening offices in Miami.
With so many U.S. companies and individuals relocating to our region over the last year, many of those relocating homebuyers are taking advantage of the condo inventory. International homebuyers, who have long preferred condos, have pent-up demand for Miami real estate and are also returning to the No. 1 market for foreign homebuyers.
Miami existing condo sales are up in all price ranges in September 2021, with major transaction increases in properties selling at $250K and above.
Lack of inventory in certain price points is impacting sales, particularly for single-family homes. More inventory is expected to come to the market in 2022 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 31.4% year-over-year to 209 sales in September 2021. Miami existing condo luxury ($1-million-and-up) sales increased 96.5% year-over-year to 167 transactions.
There are 3.9 months of supply in luxury single-family homes; 9.4 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.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers are coming here for the vaccine and purchasing property.
In November, vaccinated foreigners will be allowed to resume travel to the U.S., which will lead to more international investment in South Florida – the No. 1 destination for foreign buyers. Global buyers purchase in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures.
Miami single-family homes priced between $400K to $600K surged 27.4% year-over-year to 465 transactions in September 2021. Miami existing condo sales priced between $400K to $600K increased 161.1% to 295 transactions.
New Listings Rise for Condos; More Inventory Arriving for Low-Supply/High-Demand Market Next Year
New listings of Miami single-family homes decreased 1.9% to 1,601 from 1,632. New listings of condominiums increased 0.7%, from 2,442 to 2,460.
There is always a seasonal fade in inventory in the fall and winter. More inventory is expected to come to the market in 2022 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.
Inventory of single-family homes decreased 26.8% year-over-year in September 2021 from 4,039 active listings last year to 2,957 last month. Condominium inventory decreased 43.1% year-over-year to 8,049 from 14,148 listings during the same period in 2020.
Months’ supply of inventory is down since July 2019 for single-family, reflecting strong demand. Months’ supply of inventory for single-family homes decreased 42.1% to 2.2 months, which indicates a seller’s market. Inventory for existing condominiums decreased 68.8% to 4.3 months, which 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 September 2021 decreased 39.5% year-over-year, from 18,187 to 11,006.
Nationally, total housing inventory at the end of September amounted to 1.27 million units, down 0.8% from August and down 13.0% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the present sales pace, down 7.7% from August and down from 2.7 months in September 2020.
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 11.5% year-over-year in September 2021, increasing from $435,000 to $485,000. Miami single-family median prices have risen for 118 consecutive months, a streak of 9.83 years. Existing condo median prices increased 24.5% year-over-year, from $265,000 to $330,000. Condo median prices have increased in most of the 120 of the last 124 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 2.90% in September, up from 2.84% in August. The average commitment rate across all of 2020 was 3.11%.
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 $2.2 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.
Miami total dollar volume totaled $2.2 billion in September 2021. Single-family home dollar volume increased 21.8% year-over-year, from $975 million to $1.2 billion. Condo dollar volume increased 81.5% year-over-year, from $541 million to $982 million.
Miami Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 1.8% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 2.9% in September 2020. In 2009, distressed sales comprised 70% of Miami sales.
Total Miami distressed sales decreased 24.7% year-over-year in September 2021, from 73 to 55. Short sales and REOs accounted for 0.7% and 1.2% year-over-year, respectively, of total Miami sales in September 2021. Short sale transactions decreased 13% year-over-year while REOs decreased 30%.
Nationally, distressed sales represented less than 1% of sales in September, equal to the percentage seen a month prior and equal to September 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 98.6% in September 2021, up 2% from 96.7% last year. The median percent of original list price received for existing condominiums was 97.3%, up 3.1% from 94.4% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 18 days, a 43.8% decrease from 32 days last year. The median time to sale for single-family homes was 66 days, a 21.4% decrease from 84 days last year.
The median number of days between the listing date and contract date for condos was 35 days, down 41.7% from 60 days. The median number of days to sale for condos was 82 days, an 18% decrease from 100 days.
Miami Cash Sales 62.2% More than National Figure in September 2021
Cash sales represented 37.3% of Miami closed sales in September 2021, compared to 26.9% in September 2020. About 23% 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 45.9% of all Miami existing condo sales and 24.9% of single-family transactions.