Miami Real Estate Posts Best June Sales Month in History; Existing Condo Sales Jump 212.8% Year-Over-Year
by Chris UmpierreJuly 22, 2021
MIAMI — Miami-Dade County real estate posted its best June sales month in history as pent-up demand, more U.S. individuals and companies moving to South Florida, and record-low mortgage rates fueled a triple-digit sales increase, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system. Miami-Dade County total home sales surged 114.3% year-over-year in June 2021, from 1,893 sales to 4,057. Miami single-family home transactions rose 41.6%, from 1,089 to 1,542. Miami existing condo sales increased 212.8%, from 804 to 2,515. “Miami’s condo market has now posted a remarkable 10 consecutive months of sales gains,” MIAMI Chairman of the Board Jennifer Wollmann said. “South Florida’s strong market fundamentals— U.S. companies bringing high-paying jobs to Miami, tax-burdened Northeast and West Coast homebuyers relocating to our tax-friendly and pro-business region, year-over-year population gains, increased availability of remote work, low mortgage rates — continue to fuel Miami real estate.” This is the best June selling month since MIAMI began tracking stats in 1993. The next best June occurred in June 2014 when Miami-Dade County had 2,669 total home sales, or 1,388 fewer than June 2021. Miami home sales are also significantly higher than June 2019. Miami total home sales are up 66.5% in June 2021 vs. June 2019, from 2,436 to 4,057. Miami single-family home sales (24.9% increase) and condo transactions (109.2% jump) are higher than June 2019. Miami Condo Market’s Strong Fundamentals Leads to Robust First Six Months of 2021 Miami’s existing condo market posted 11,903 sales through the first six months of 2021, a 126.8% year-over-year increase from the same period in 2020. Miami single-family home sales netted 8,097 transactions in the first six months of 2021, up 45.7% from last year. Unlike many other major cities that have low inventory, Miami existing condo market has 5.1 months of condo supply. With so many U.S. companies and individuals relocating to our region over the last year, many of those relocating homebuyers are acting on 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 June 2021, with major transaction increases in properties selling at $400K and above. Lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply. More inventory is expected to come to the market later this year 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 253.4% year-over-year to 311 sales in June 2021. Miami existing condo luxury ($1-million-and-up) sales increased 614% year-over-year to 307 transactions. Comparing the June 2021 luxury stats to June 2019 also shows major gains. Miami single-family luxury sales surged 182.7% from June 2019 to June 2021. Miami condo luxury transactions jumped 303.9% from June 2019 to June 2021. There are 4.6 months of supply in luxury single-family homes; 11.8 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. Miami single-family homes priced between $400K to $600K surged 78.8% year-over-year to 556 transactions in June 2021. Miami existing condo sales priced between $400K to $600K increased 549.2% to 396 transactions. Single-Family Home Inventory Rises Month-over-Month as More Listings Arrive to the Market Miami single-family homes inventory rose for the first time in months in June 2021 and new single-family listings significantly rose year-over-year, two indicators that more inventory is heading to the low-supply/high demand market. The number of Miami single-family home active listings increased 2.6% in June 2021 compared to May 2021, from 2,794 to 2,867. Single-family inventory had been trending down for 22 months so the monthly increase is robust news for the market. For single-family homes, new listings increased 22.6% year-over-year, from 1,467 to 1,798. Inventory of single-family homes decreased 41.8% year-over-year in June 2021 from 4,926 active listings last year to 2,867 last month. Condominium inventory decreased 41.5% year-over-year to 8,440 from 14,432 listings during the same period in 2020. Months supply of inventory for single-family homes decreased 54.2% to 2.2 months, which indicates a seller’s market. Inventory for existing condominiums decreased 63.6% to 5.1 months, which indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply. Months supply of inventory is down since July 2019 for single-family, reflecting strong demand. Total active listings at the end of June 2021 decreased 41.6% year-over-year, from 19,358 to 11,307. New listings of Miami single-family homes increased 22.6% to 1,798 from 1,467. New listings of condominiums increased 24.9%, from 2,219 to 2,772. Nationally, total housing inventory at the end of June amounted to 1.25 million units, up 3.3% from May’s inventory and down 18.8% from one year ago (1.54 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, modestly up from May’s 2.5-month supply but down from 3.9 months in June 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 28.7% year-over-year in June 2021, increasing from $388,500 to $500,000. Miami single-family median prices have risen for 115 consecutive months, a streak of 9.6 years. Existing condo median prices increased 29.8% year-over-year, from $262,000 to $340,000. Condo median prices have increased or stayed even in 117 of the last 121 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 2.98% in June, slightly up from 2.96% in May. The average commitment rate across all of 2020 was 3.11%. NAR Chief Economist Lawrence Yun expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021. 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 $3.1 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. Single-family home dollar volume increased 120.7% year-over-year, from $658.5 million to $1.5 billion. Condo dollar volume increased 375.9% year-over-year, from $330.2 million to $1.6 billion. Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Only 19 of the 1,912 condominium buildings in Miami-Dade, Broward and Palm Beach counties are approved for Federal Housing Administration loans as of July 16, 2021, according to the U.S. Department of Housing and Urban Development. A better condo approval process is expected to increase sales. The guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR have championed, are expected to generate increased homeownership opportunities. Miami Distressed Sales Keep Dropping, Reflecting Healthy Market Only 1.5% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 5% in June 2020. In 2009, distressed sales comprised 70% of Miami sales. Total Miami distressed sales decreased 34.7% year-over-year in June 2021, from 95 to 62. Short sales and REOs accounted for 0.5% and 0.9% year-over-year, respectively, of total Miami sales in June 2021. Short sale transactions decreased 15.4% year-over-year while REOs decreased 42%. Nationally, distressed sales represented less than 1% of sales in June 2021, down from 3% in June 2020. National, State Housing Demand Robust as More Inventory Expected to Arrive Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 1.4% from May to a seasonally adjusted annual rate of 5.86 million in June. Sales climbed year-over-year, up 22.9% from a year ago (4.77 million in June 2020). Statewide, closed sales of single-family homes in June totaled 34,165, up 23.6% year-over-year, while existing condo-townhouse sales totaled 16,155, up 79.6% over June 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written. Nationally, the median existing-home price for all housing types in June was $363,300, up 23.4% from June 2020 ($294,400), as every region recorded price jumps. This marks 112 straight months of year-over-year gains. The statewide median sales price for single-family existing homes in June was $351,000, up 24.5% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $256,945, up 22.4% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less. Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price The median percent of original list price received for single-family homes was 99.4% in June 2021, up 3.6% from 95.9% last year. The median percent of original list price received for existing condominiums was 96.4%, up 3.8% from 92.9% last year. The median number of days between listing and contract dates for Miami single-family home sales was 14 days, a 77.8% decrease from 63 days last year. The median time to sale for single-family homes was 63 days, a 41.1% decrease from 107 days last year. The median number of days between the listing date and closing date for condos was 51 days, down 41.4% from 87 days. The median number of days to sale for condos was 96 days, a 26.2% decrease from 130 days. Miami Cash Sales 76.1% More than National Figure in June 2021 Cash sales represented 40.5% of Miami closed sales in June 2021, compared to 25.9% in June 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 49.4% of all Miami existing condo sales and 25.9% of single-family transactions. To access June 2021 Miami-Dade Statistical Reports, visit http://www.SFMarketIntel.com Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.