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MIAMI: Signs of Slowing Sales in August

by James McClister

Miami-sales-prices-single-family-home-condos-association-realtors

The Miami Association of Realtors released its monthly sales report this week, and the findings told the story of a still growing market with slowing panache.

Across the area’s most popular housing stock – single-family homes and condominiums – existing-sales inched forward 2.9 percent year-over-year in August, but it was condo sales that drove the increase. Since last August, existing condo sales increased 6.5 percent from 1,252 to 1,334, while existing single-family sales stumbled, dropping 1 percent.

Despite the slowing pace of sales, prices continue to improve month after month. The median sales price for single-family homes jumped 4.2 percent; condo prices, which rose just over 12 percent, pushed the median sales price over the $200,000 mark.

While the prices in Miami have been surging for years, MIAMI has been careful in pointing out that average prices are still eclipsed by more traditionally expensive global markets. According to the National Association of Realtors, the price for a $150,000 condo in Miami would be “at least” five times higher in markets such as London, Hong Kong and New York.

Single-Family Homes Look Healthy, Condos Sick

The pace of sales is slowing not only at the affordable end of the market, but throughout, as we recently reported. However, demand from buyers – domestic and international – has been persistent in the Magic City, which has had the effect of speeding up the sales process and increasing the average percent of original list price received in the transaction for single-family homes.

The median number of days on the market for Miami single-family homes dropped 19.1 percent to 38 days in August 2015, from 47 days in August 2014. The average percent of original list price received was 96.1 percent, an increase of 0.7 percent from a year earlier.

The same was not the case for condos, which are selling slower and for less – likely a result of the property type’s already deep and still growing inventory. The median number of days on the market for condominiums sold in August 2015 was 64 days, a 20.8 percent increase from 53 days in August 2014. The average percent of original list price received was 93.2 percent, a 1.6 percent year-over-year decrease.

The area’s condo market has certainly seen better days, but MIAMI Senior Vice President of Government Affairs and Housing Danielle Blake said that the association is continuing to “work on ways and programs to increase the number of local condo buildings that are approved for FHA loans,” referring to the lack of Federal Housing Administration loans available for a large number of existing Miami condos. Many are blaming the shortage for the city’s condo woes.

Of the 8,523 condo buildings in Miami-Dade and Broward Counties, only 29 are approved for FHA loans, according to the Florida Department of Business and Professional Regulation and FHA.

Market Still Benefiting From “Positive Momentum”

In a statement accompanying the report’s release, the association’s 2015 residential president, Christopher Zoller, celebrated the results, referring to the market’s direction as the result of “positive momentum” while explaining the single-family sales dip through a more encouraging lens.

“Single-family transactions, which only declined 1 percent in August, remain on pace to finish as one of the top sales years on record in Miami history,” he said. “And despite continued competition from South Florida’s strong pre-construction market, existing condos registered a 6.5 percent sales growth year-over-year.”

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