Miami-Dade County real estate set a record for the most total home sales in a three-month period in the second quarter, as pent-up demand, more U.S. individuals and companies moving to South Florida and record-low mortgage rates fueled transactions, according to the Miami Association of Realtors.
Miami-Dade home sales surged 142.4% year-over-year, from 4,766 to 11,553. Single-family transactions rose 66.9%, from 2,688 to 4,486. Miami single-family homes have now posted year-over-year sales gains in eight of the last nine quarters, a span of two-plus years. Miami existing condo sales, meanwhile, increased 240.1%, from 2,078 to 7,067.
“Miami real estate continues to break records as more Northeastern and West Coast homebuyers and tech and finance companies relocate here,” Miami Association of Realtors Chairman Jennifer Wollmann said in a release.
“Miami real estate sales were rising before the pandemic, and the pandemic only accelerated the demand for our incredible live, work and play lifestyle. Many of today’s buyers are making South Florida their primary home, which is important because these full-time residents boost, impact and diversify many sectors of our economy.”
The quarter represents the best quarterly sales period since the association began tracking stats in 1993. Transactions also show strong gains when compared with the second quarter of 2019. By that metric, sales were up 46.9%, rising from 7,861 to 11,553 deals.
Lack of inventory at certain price points is impacting the pace of sales, particularly for single-family homes. Increased housing starts and more sellers listing properties should help alleviate the lack of supply, however.
Miami-Dade County single-family home luxury ($1 million-plus) transactions surged 346.4% year-over-year to 942 transactions in the second quarter. Luxury condo sales increased 651.6% to 917 deals during the same period.
Record-low interest rates, a record-high S&P 500, the appeal of stable assets in a volatile economy to homebuyers leaving tax-burdened states to purchase in Florida, where there is 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.
With global COVID infections rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers, many of whom are also coming for the vaccine and purchasing real estate.
Many South Florida homeowners have refinanced their home loans, thanks to low interest rates. This means that not only are many homeowners making lower mortgage payments, but they are also doing so while their home equity significantly increases. Home equity can be tapped for renovations, college loans and more.
Miami single-family home median prices rose 31.6% year-over-year during the quarter, from $380,000 to $500,000. Median prices have now increased for 38 consecutive quarters, a streak spanning 9.5 years. Miami existing condo median prices rose 25.8% year-over-year, from $262,250 to $330,000.
Rising median prices are happening nationwide, as record-low mortgage rates and the increased availability of remote work and education have accelerated the demand for housing. Should mortgage rates resume their upward climb, home-price growth is likely to slow in response. Also, as more sellers list properties, the increased inventory should slow the rate of price increases.
Miami remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 85 square meters of prime property, according to The Wealth Report from Knight Frank. Other cities around the world offer significantly less real estate for $1 million, like Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35).
While other industries have 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, according to the association.
Miami’s low housing inventory is attracting multiple bids and buyers going over list price. The median percent of original list price received during the quarter was 98.6% for single-family homes and 95.8% for condos. The median time to contract for single-family home listings was 18 days, a 67.3% drop from 55 days in the second quarter of 2020, while the median time to contract for existing condos was 56 days, a 27.3% year-over-year decline.
Cash sales represented 39.1% of Miami closures in the quarter, compared to 37.3% in the year-ago period. About 23% of U.S. home sales are made in cash.
The high percentage of cash buyers reflects Miami’s position as the preeminent American real estate market for foreign buyers, who tend to purchase with cash, as well as buyers moving from more-expensive U.S. markets.
See more at Miami Association of Realtors