The Miami-Dade County real estate market is on pace to have its second biggest sales year ever as the resilient market slowly inches toward equilibrium in the wake of rising mortgage rates, according to September 2022 statistics from the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“The unprecedented rise in mortgage rates – from 3% to 7% – plus the fact that sales will be compared to Miami’s historic 2021 real estate market means transactions this winter will be down, not just in Miami, but all over the country,” MIAMI Chairman of the Board Fernando Arencibia Jr. said. “However, Miami’s strong market fundamentals will insulate our market to a large degree. At the heart of it all, real estate is a business built on supply and demand. We have yet to see statistically significant increases in new listings, so even with a reduced buyer pool we are still tracking multiple offers because inventory has not moved significantly.”
Miami Projected to Post Second-Biggest Sales Year Ever
The Miami-Dade County real estate market has already sold 25,990 total homes sales (or 95 transactions per day) through September 2022, putting it on pace to be the second-best year ever for total annual sales behind historic 2021.
In comparison to a record September 2021, Miami September 2022 sales decreased 28.1% year-over-year, from 3,031 to 2,178, because of rising mortgage rates and low inventory.
September 2022 total sales outperformed Miami’s pre-pandemic September totals. Miami averaged 2,129 total homes sales in the month of September from 2018-19) and had 2,178 sales in September 2022.
Single-family home sales decreased 30% year-over-year, from 1,241 in record-breaking September 2021 to 869 in September 2022, due to lack of inventory and rising mortgage rates. Miami existing condo sales decreased 26.9% year-over-year, from 1,790 record-breaking September 2021 to 1,309 in September 2022, due to lack of inventory and rising mortgage rates.
The Fed, which voted for another Fed Funds rate increase in September, is intent on slowing 40-year high inflation. While the Fed doesn’t set mortgage rates, it affects them through its conduct of monetary policy. As a result, the 30-year fixed mortgage rate has fluctuated from 2.99% to 6.92% in the last 52 weeks, an unprecedented range of volatility.
September 2022 marks the seventh consecutive month of 5% or higher mortgage rates. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.11% in September, up from 5.22% in August. The average commitment rate across all of 2021 was 2.96%.
Housing is sensitive to rising mortgage rates. 2018 marked the last time mortgage rates hit 5%. Miami September 2022 total home sales finished 7.9% higher than September 2018 (2,019 vs. 2,178).
Miami Real Estate’s Strong Market Fundamentals Vs. High Rates, Low Inventory
- Global companies, such as the $54 billion-dollar hedge fund Citadel, continue relocating to Miami, bringing high-paying jobs.
- Demand from homebuyers from high-tax, high-density states remain high as Florida driver license swaps are up double digits for relocating Californians and New Yorkers.
- Miami is home to the lowest unemployment rate in the country.
- Miami prices keep rising (10+ years of consecutive price appreciation) and homes keep selling fast (27 days on average).
- Global buyers, who because of pandemic protocols haven’t been able to purchase as they are accustomed to in recent years, are returning in mass to the No. 1 destination for global homebuyers. This month, Miami was ranked as the 1 destination in the world for foreign investment by Financial Times.
- Miami’s percentage of cash buyers (39.5%) is significantly higher than the national average (22%).
- Demographic shifts (Millennials reaching prime home-buying age and surging senior/retiree population growth)
- High percentage of the workforce working remotely favors the Miami market, where many have relocated to live, work and play because of our lifestyle, weather and more.
South Florida: A Bargain in Comparison to Other Global Cities & U.S. Metros
Miami-Fort Lauderdale-West Palm Beach’s price per square meter is $3,170, far below at least 30 global cities and 13+ U.S. Metros including markets such as Hong Kong ($28,570), New York City ($17,191), San Francisco-Oakland-Hayward, CA ($8,250), Madrid, Spain ($6,173), Los Angeles-Long Beach-Glendale, CA ($4,740) and Seattle-Tacoma-Bellevue, WA ($4,460), according to National Association of REALTORS Profile of International Transactions in U.S. Residential Real Estate 2022.
Miami-Dade County single-family home median prices increased 17.1% year-over-year in September 2022, increasing from $485,000 to $568,000. Miami single-family median prices have risen for 130 consecutive months (10.83 years), the longest running streak on record. Existing condo median prices increased 19.7% year-over-year, from $330,000 to $395,000. Condo median prices have increased in 132 of the last 136 months.
While median prices have increased nationally so has house-buying power because of a long-run decline in rates before March 2022 and the slow, but steady growth of household income. West Palm Beach (No. 5) and Miami (No. 6) ranked among the Top-10 U.S. metros where homebuyer income grew the most during the pandemic via Aug. 2022 Redfin report.
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Inventory for Miami single-family homes (3.5 months) and condos (3.5 months) are low. Also, one of the supports for home prices is rents and rents are rising strongly.
Locally, the greater share of Miami luxury sales is also part of the reason for the large year-over-year increase in median prices.
Miami Single-Family Inventory Rises for Fifth Consecutive Month While Condos Decreased
Inventory of single-family homes increased 32.3% year-over-year in September 2022 from 2,957 active listings last year to 3,912 last month. Condominium inventory dropped 20.5% year-over-year to 6,399 from 8,049 listings during the same period in 2021.
New listings of Miami single-family homes decreased 15.6% to 1,351 from 1,601. New listings of condominiums decreased 24.5%, from 2,460 to 1,858.
Months’ supply of inventory for single-family homes increased 59.1% to 3.5 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums decreased 18.6% to 3.5 months, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of September 2022 decreased 6.3% year-over-year, from 11,006 to 10,311.
Nationally, total housing inventory at the end of September was 1.25 million units, which was down 2.3% from August and 0.8% from the previous year. Unsold inventory sits at a 3.2-month supply at the current sales pace – unchanged from August and up from 2.4 months in September 2021.
Miami Real Estate Posts $245 Million Local Economic Impact in September 2022
Every time a home is sold it impacts the economy: income generated from real estate industries (commissions, fees and moving expenses), expenditures related to home purchase (furniture and remodeling expenses), multiplier of housing related expenditures (income earned as a result of a home sale is re-circulated into the economy) and new construction (additional home sales induce added home production).
The total economic impact of a typical Florida home sale is $112,500, according to NAR. Miami-Dade County sold 2,178 homes in September 2022 and had a local economic impact of $245 million.
Miami total dollar volume totaled $1.6 billion in September 2022. Single-family home dollar volume decreased 36.1% year-over-year, from $1.2 billion to $759.6 million. Condo dollar volume decreased 15.3% year-over-year, from $982.9 million to $832.8 million.
Miami Distressed Sales Remain Low, Reflecting Healthy Market
Total Miami distressed sales decreased 49.1% in September 2022, from 55 to 28. Short sales and REOs accounted for 0.4% and 0.9% year-over-year, respectively, of total Miami sales in September 2022. Short sale transactions decreased by 60% year-over-year while REOs decreased by 42.9%.
Only 1.2% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 1.8% in September 2021. In 2009, distressed sales comprised 70% of Miami's sales.
Miami’s percentage of distressed sales is on par with the national figure. Nationally, distressed sales represented approximately 2% of sales in September, a marginal increase from 1% in September 2021.
Miami’s Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 20,099 in September 2022, down 29% year-over-year, while existing condo-townhouse sales totaled 8,406, down 29%. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions retracted 1.5% from August to a seasonally adjusted annual rate of 4.71 million in September. Year-over-year, sales waned by 23.8% (down from 6.18 million in September 2021).
The statewide median sales price for single-family existing homes was $403,880, up 13.8% 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 $307,250, up 20.5% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, the median existing-home price for all housing types in September was $384,800, an 8.4% jump from September 2021 ($355,100), as prices climbed in all regions. This marks 127 consecutive months of year-over-year increases, the longest-running streak on record.
Miami Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 96.6% in September 2022, down 2% from 98.6% last year. The median percent of original list price received for existing condominiums was 97.2%, down 0.1% from 97.3% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 24 days, up from 18 days last year. The median time to sale for single-family homes was 68 days, a 3% increase from 66 days last year.
The median number of days between the listing date and contract date for condos was 28 days, down 20% from 35 days. The median number of days to sale for condos was 71 days, a 13.4% decrease from 82 days.
Miami Cash Sales 79.5% More than National Figure in September 2022
Cash sales represented 39.5% of Miami's closed sales in September 2022, compared to 37.3% in September 2021. About 22% of U.S. home sales are made in cash, according to the latest NAR statistics.
Cash buyers are not deterred by rising rates. 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 49.6% of all Miami's existing condo sales and 24.3% of single-family transactions.
To access September 2022 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.