In its third-quarter report, the Miami Association of Realtors offered reassurances of strong demand and market dynamism, although it did report on a contracting market overdue for a serious correction.
Here are the three main things the association looked at:
1. Prices keep going up – Greater Miami’s single-family and condo markets both saw price jumps from Q3 2015 to Q3 2016, marking 19 consecutive quarters of appreciation. The area’s median single-family home price is now $300,000 – nearly $60,000 above the national median, and almost $80,000 above the state’s – while the median condo price rose 8.9 percent to $217,000.
Mark Sadek, MIAMI’s 2016 board chairman, explained the increases as a matter of demand – not local, but foreign. “Homebuyers throughout the United States and the world are relocating their families here because of our exciting lifestyle, warm weather, diversified economy, quality schools and multicultural society.”
2. Sales keep falling down – Sadek’s reasoning, however, does not explain the huge drops in sales. Total sales throughout Miami-Dade County dropped 15.3 percent year-over-year in Q3, which includes a 6.8 percent drop in single-family sales and a 19.1 percent drop in condo sales; both markets have seen sales decline for more than a year.
And while it’s true, as the association pointed out, that mid-market sales (i.e., between the $200,000 and $600,000) have increased 10.3 percent from Q3 2015, those figures are being driven by strong showings in the few neighborhoods that remain affordable, such as: a 90 percent increase in sales in Gladeview, where the median sales price is $90,000; an 80 percent increase in Hialeah Gardnes, where the median price is $267,500; and a 43.8 percent increase in Coral Terrace, where the median price is $349,500.
3. The final days of affordability – In recent months, the association has been quick to cite home sales increases in Miami’s middle market as a way to quell fears about a possible bubble. But the reality is the middle market is quickly disappearing. From Sept. 2014 to Sept. 2016, single-family home inventory priced less than $400,000 in Miami-Dade fell by 57 percent, according to Keyes Co. data cited in a Builder magazine report.
And while the number of available homes in the area’s affordable price range have been dwindling, overall inventory is surging. Single-family inventory from Q3 2015 to Q3 2016 rose 8 percent, while condo inventory, which is already near a year’s supply, saw a 20.5 percent increase. The contrast (as well as constant price increases) suggests the majority of newly available homes are over the $400,000 mark.