Condo sales in the Greater Miami Area fall by 35% annually in October

Inflation at a 40-year high, rising interest rates, and economic uncertainty are deterring buyers

The Miami Association of Realtors reports that due to high mortgage rates, uncertain economic conditions, and a lack of available inventory, the number of residential property sales transactions in Miami-Dade County in October 2022 dropped by 30.6% from 2,978 in October 2021 to 2,067 today.

Due to a lack of available inventory and rising mortgage rates, single-family home sales fell by 23.9% year over year, from 1,161 in record-breaking October 2021 to 884 in October 2022. Due to a lack of inventory and rising mortgage rates, Miami’s existing condo sales fell 34.9% year over year from a record-breaking 1,817 in October 2021 to 1,183 in October 2022.

The Fed is determined to reduce the 40-year high inflation rate and has raised the fed funds rate multiple times. Despite not setting mortgage rates, the Fed has an impact on them through the way it implements monetary policy. The Fed’s December 2022 meeting is expected to result in a 50-basis point increase in the federal funds rate, followed by smaller rate increases in the first quarter of 2023 and perhaps a pause in the second half of the year while the Fed evaluates the impact of the rising mortgage rates on the economy. This prediction is made by Gay Cororaton, the chief economist for Miami Realtors.

The eighth month in a row that mortgage rates have been 5% or higher is October 2022. The average commitment rate for a 30-year, conventional, fixed-rate mortgage, according to Freddie Mac, increased to 6.90% in October from 6.11% in September. Over the course of 2021, the average commitment rate was 2.96%.

First, increase in Miami’s total active listings since August 2019

By the end of October 2022, there were 10,799 active listings, up 2.2% from 10,570 the previous year.

In October 2022, there were 4,142 single-family homes for sale, up 41.9% from 2,918 active listings in the same month the previous year. When compared to the same period in 2021, there were 7,652 listings for condos, a 13% drop in inventory.

Single-family home new listings in Miami fell by 13.9% to 1,348 from 1,566. Condominium new listings fell by 24.5%, from 2,429 to 1,833.

Single-family home months’ supply increased 68.2% to 3.7 months from year to year, indicating a seller’s market. Existing condominium inventory fell by 5% to 3.8 months, also pointing to a seller’s market. A market with an equal number of buyers and sellers offers a supply of six to nine months.

At the end of October, there were 1.22 million housing units on the market nationwide, which was a decrease of 0.8% from both September and one year earlier. At the current sales rate, unsold inventory has a 3.3-month supply, up from 3.1 months in September and 2.4 months in October 2021.

Distressed sales in Miami are still low, reflecting a strong market.

Miami’s overall distressed sales dropped from 45 to 32 in October 2022, a 28.9% decrease. In October 2022, Miami sales as a whole increased by 0.4% and 1.1%, respectively, year over year. Compared to the previous year, short sale transactions fell by 52.6%, while REOs fell by 11.5%.

In contrast to October 2021, only 1.5% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales. 70% of Miami sales in 2009 were distressed sales.

The percentage of distressed sales in Miami is comparable to the national average. Similar to October 2021, distressed sales made up about 1% of sales nationwide in October.

Miami’s Sales Percentage Continues to Surpass National and State Averages

In Florida, closed sales of single-family homes statewide totaled 20,837 in October 2022, down 24.6% year-over-year, while existing condo-townhouse sales totaled 8,356, down 26.9%. After the writing of the sales contracts, closed sales may take place 30 to 90 days or more later.

A seasonally adjusted annual rate of 4.43 million existing home sales transactions was completed nationwide in October, a 5.9% drop from September’s total. Sales decreased by 28.4% on a yearly basis (down from 6.19 million in October 2021).

Data from the Florida Realtors Research Department in collaboration with regional Realtor boards/associations show that the statewide median sales price for existing single-family homes was $401,990, an increase of 12% from the previous year. The median price for condo-townhouse units in the state last month was $310,000, an increase of 19.2% from the previous figure. Half of the homes sold for more and half for less than the median price.

The national median existing-home price for all housing types in October increased from October 2021 ($355,700) to $379,100, a 6.6% increase, as prices increased nationwide. The longest streak ever is now complete, with increases over the prior year occurring in 128 straight months.

Multiple Bids on Miami Real Estate, Over-List Price Purchases

In October 2022, the median amount of the original list price received for single-family homes was 96%, which is a 2.7% decrease from 98.7% the previous year. Existing condominiums received 96.9% of their original list price on average, which is a decrease of 0.4% from 97.3% from the previous year.

The median number of days between the dates of the listing and the contract for Miami single-family home sales increased from 22 to 30 from the previous year. For single-family homes, the median time to sale increased from 69 days to 75 days, an 8.7% increase.

For condos, the median number of days between the date of listing and the date of the contract was 31, down 8.8% from 34 days. Condominiums sold in a median time of 71 days, down 10.1% from 79 days.

In October 2022, Miami Cash Sales exceeded the national average by 46.5%

In Miami, closed sales in October 2022 accounted for 38.1% of all transactions, up from 37% in October 2021. According to the most recent NAR statistics, about 26% of U.S. home sales are made in cash.

Rising rates have no effect on cash buyers. The high percentage of cash buyers is a reflection of Miami’s top ranking as the leading American real estate market for foreign buyers, who frequently pay in full upfront. Some of these buyers are also relocating from more expensive U.S. markets where they can purchase more thanks to their real estate sales proceeds.

48.4% of all Miami existing condo sales and 24.4% of single-family transactions were cash deals.