With housing inventory continuing to fall and demand through the roof, prices have been skyrocketing in the Miami-Dade housing market.

By Peter Ricci

Miami home prices rose for the ninth consecutive month, according to the Miami Association of Realtors (MAR), with condo prices leading the charge with a 28.4 percent year-over-year increase. And single-family properties were not far behind, with prices rising by 10.8 percent from August 2011 to a median price of $195,000.

Falling Miami-Dade Housing Inventory = Higher Prices

The reason for the price increases is undoubtedly residential housing inventory in Miami-Dade, which continues to fall further with each passing month as sales activity remains high:

• Housing inventory in August fell by 26 percent in Miami-Dade from last year, with active residential listings declining from 15,405 to 11,431.
• Currently, there are just 4.2-months supply of housing in Miami-Dade, a relative shortage compared to the 6.2 months for the national housing market.
• Total residential sales in Miami-Dade rose 7.0 percent from last year, and existing-condo sales rose 8.0 percent year-over-year.
• Distressing property sales continued to make up a large portion of residential sales activity, comprising 45.8 percent of all closed residential sales in Miami-Dade; that is a decline, though, from August 2011, when distressed sales made up 56 percent of the market.
• Also, international buyers were busy as ever; 64 percent of closed residential sales were all-cash sales, accounting for 45 percent of single-family home closings and 78 percent of condo closings – and nearly 90 percent of all foreign buyers in Florida purchase with cash.

Pomares – “Evident Demand” for Miami Real Estate

There are two good signs to Miami’s falling inventory – on one hand, it opens the door for more new construction properties, something that has not been a feature of Miami’s marketplace in some time, and that means less and less distressed sales will dominate the residential landscape, which seems to already be happening given the yearly decline in distressed transactions. Martha Pomares, the 2012 chairman of the board for MAR, said despite Miami’s dwindling housing inventory, the market remains strong. “Despite the shortage of housing inventory, Miami home sales remain strong and continue to drive significant price appreciation,” Pomares said. “There is evident demand for Miami properties, particularly from foreign buyers and investors who recognize Miami’s desirability and profitability. Miami remains the top market for foreign buyers in the nation, and local international activity continues to grow.”