What downturn? Miami-Dade home sales and prices both up in June

by Kerrie Kennedy

Pending home sales in Miami-Dade County were up in June, according to the latest report from the MIAMI Association of Realtors.

A future indicator of closings one to two months out, pending sales for Miami single-family homes increased 33.8% year over year to 1,820, while new pending sales for condos increased 12.9% in June to 1,504.

Along with contract activity, median prices in Miami-Dade County were also up last month. Prices for single-family homes increased 5% year over year, rising from $370,000 to $388,500, the 103rd consecutive month of price increases. Existing condo prices were also up in June, climbing nearly 5% year over year from $250,000 to $262,000.

“The Miami-Dade real estate market continues a robust recovery evidenced by continuing surging pending sales and increasing market activity,” said MIAMI Association of Realtors board chair Jorge L. Guerra Jr. in a press release. “Historically low mortgage rates, virtual tools and services, and pent-up demand have many buyers continuing their homebuying process, which is generating strong demand from local and out-of-state buyers, particularly those in high-tax and high-density areas.”

According to the report, pending sales, which began surging in mid-April, are now stronger than they were prior to the COVID-19 stay-at-home orders.

While home sales in Miami are taking longer to close, up to 63 days in June from 49 days a year earlier, that can mostly be attributed to social distancing and shelter-in-place restrictions that have delayed the process.

But perhaps a better indicator of Miami’s market health is the share of homes selling for close to list price. In June, single-family homebuyers paid 95.8% of the original list price,  up 0.3% from 95.6% last year.

Like other markets across the country that are showing unexpected resilience in the face of a national economic meltdown, Miami-Dade’s market was exceptionally strong prior to the pandemic, bolstered by robust demand from foreign buyers and those fleeing tax-burdened states.

As the Miami region continues to see homebuying interest from Northeastern states (which has only accelerated thanks to homeowners seeking to flee urban areas due to COVID-19 concerns), mortgage applications, another indicator of future sales, are also on the rise in South Florida. According to The Mortgage Bankers Association, mortgage applications in Miami rose by 5.1% week over week for the week ending July 10.

While cash transactions were down slightly in June, representing 25.9% of total closed sales in Miami as compared to 31.9% a year earlier, the share is still far greater than the 16% national figure for cash buyers, pointing to South Florida’s ability to attract a diverse number of international homebuyers who tend to purchase properties using cash.

And Miami is still a bargain compared to other global cities. Here, $1 million can net homebuyers 93 square meters of prime property, according to Knight Frank’s The Wealth Report 2019. That same price will get homebuyers 36 square meters in Los Angeles, 31 square meters in New York, 22 square meters in Hong Kong and a mere 16 square meters in Monaco.

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