Residential Sales in Greater Miami Experience 18% Annual Decline in June
According to recent data from the Miami Association of Realtors®, home sales in greater Miami experienced an 18.2% year-over-year decline in June 2023. This drop can be attributed to higher mortgage rates and inadequate housing supply in certain price ranges.
Specifically, sales of single-family homes in Miami decreased by 11.9% compared to June 2022. The current market has a lower inventory in certain price points, contributing to this decline.
The majority of home purchases in June 2023 were finalized in May, when mortgage rates reached a peak of 7.14%. In contrast, rates were at 5.27% on May 5, 2022.
Sales of existing condos in Miami declined by 22.4% year-over-year, mainly due to limited inventory and rising mortgage rates.
On a positive note, pending sales of single-family homes in Miami-Dade County increased slightly from the previous year, marking the first time this figure has been in positive territory in 19 months. Pending sales are considered an indicator of future sales activity. Additionally, South Florida showing appointments saw a 7% year-over-year increase, demonstrating growing interest in the market.
Ines Hegedus Garcia, Chairman of Miami Realtors®, mentioned that buyers are adjusting to the new normal of higher interest rates, but the supply of homes in Miami-Dade County remains historically low, limiting sales in this high-demand market. Garcia also emphasized the importance of monitoring new listings to take advantage of the immense potential of Miami’s thriving real estate market.
Median home prices in Miami-Dade County rose by 7.5% year-over-year in June 2023, reaching $622,500 for single-family homes. This marks the 139th consecutive month of price increases, making it the longest running-streak on record. Median condo prices increased by 2% to $418,000, with prices remaining steady or increasing for 139 out of the last 145 months.
Miami is leading the nation in annual home price appreciation, as reported by CoreLogic’s monthly Home Price Insights. In May, home prices in Miami saw an 11.8% annual increase.
These findings shed light on the current state of the Miami real estate market and provide valuable insights for buyers, sellers, and industry professionals.
The surge in South Florida’s wealth migration has caused local prices to escalate. According to Miami Realtors’ analysis of migration data released by the Internal Revenue Service, in-migration contributed an impressive $16 billion to South Florida household income in 2021.
In 2021, new households relocating to Miami-Dade had an average adjusted gross income of $229,300, while Broward County welcomed new households with an average adjusted gross income of $102,600. Palm Beach County witnessed new households with an average adjusted gross income of $242,200.
Miami-Dade experienced a 15% increase in the number of people relocating, with 45,430 new residents in 2021 compared to 39,562 in 2020 and 37,630 in 2019. The top counties from which households moved into Miami-Dade included Kings County, New York; Cook County, Illinois; Queens County, New York; and Harris County, Texas.
Home prices are driven by the dynamics of supply and demand. Limited supply coupled with high demand leads to higher prices. Currently, the inventory of single-family homes (3.3 months) and condos (5 months) in Miami is relatively low. Furthermore, rising rental prices provide additional support to home prices.
Although inventory is increasing, Miami-Dade’s inventory remains near historic lows. The average monthly inventory for Miami-Dade is 20,302, while the current inventory stands at 9,027. This represents a significant 57.9% decrease from pre-pandemic levels in June 2019 (22,163 to 9,331).
At the end of June, the total number of active listings decreased by 2.3% compared to the previous year, from 9,239 to 9,027.
Inventory of single-family homes decreased by 14.9% YoY in June, from 3,422 active listings in the previous year to 2,911 listings last month. On the other hand, condominium inventory increased by 5.1% YoY, reaching 6,116 listings compared to 5,817 during the same period in 2022.
New listings for single-family homes experienced a significant decline of 36%, falling from 1,939 to 1,241 YoY. Similarly, new listings for condominiums saw a decrease of 32.6%, from 2,638 to 2,132 YoY.
The months’ supply of inventory for single-family homes increased by 17.9% YoY to 3.3 months, indicating a seller’s market. Existing condominium inventory increased by 72.4% YoY to 5 months, also indicating a seller’s market. A balanced market typically offers between six and nine months of supply, ensuring fair conditions for buyers and sellers.
In June 2023, the total dollar volume in Miami reached $1.98 billion. Single-family home dollar volume decreased by 13.66% YoY to $1 billion, while condo dollar volume decreased by 25.3% YoY to $941.7 million.
Last month in Miami, only a small fraction of closed residential sales, specifically 1.4%, were distressed. This includes bank-owned properties (REOs) and short sales. This figure is lower than the 1.9% recorded in June 2022. It is worth noting that in 2009, distressed sales made up a significant 70% of all sales in Miami.
In terms of specific categories, short sales and REOs accounted for 0.3% and 0.5% of total Miami sales, respectively, when compared to the previous year’s figures of June 2023.
Miami’s percentage of distressed sales is in line with the national average. Nationally, distressed sales represented 2% of all sales in June, showing little change from the previous month and the same period last year.
Cash sales, on the other hand, constituted 43.5% of Miami’s closed sales in June 2023, slightly lower than the 43.9% recorded in June 2022. In comparison, approximately 26% of home sales across the United States are completed using cash, as indicated by the latest NAR statistics.
For Miami specifically, cash sales played a more significant role, representing 55.9% of all existing condo sales and 26.6% of single-family transactions.