Existing home prices rose by double digits in Miami-Dade and Broward
02/21/2014 6:00 AM
02/21/2014 7:46 PM
The words “condo” and “glut” are creeping into more conversations, as the inventory of used condos for sale in Miami-Dade County hit its highest level in two-and-a-half years in January, with 10,398 active listings.
The Miami Association of Realtors reported the spike in condo inventory Friday in its January report that showed Miami-Dade’s impressive housing rebound remained on track, even as buyers are gaining more muscle.
The rise in listings comes as condo resales are facing stiff competition from the thousands of new pre-construction units in the works in Miami-Dade.
“You’re starting to see a quote ‘glut,’ not because of lack of demand, but because people have more options,’’ said Jon Mann, manager of Coldwell Banker’s Brickell office. The upshot, he said, is “more push back from buyers.”
“Everyone wants the newest and shiniest thing. South American buyers are purchasing brand new units,” Mann said.
Condo owners are taking advantage of recent strong price gains and the chance to showcase their places when many prospective buyers are in town, said Alicia Cervera Lamadrid, managing partner of Cervera Real Estate, which markets pre-construction condo projects for developers and also handles resales.
“It’s the height of the season,” Cervera said. “I’m not particularly concerned [about the rising inventory].”
In January, Miami-Dade — bucking a national slowdown — posted a 12.9-percent increase in existing condo sales and a 9.8 percent gain in existing single-family home sales, compared with January 2013.
The median price of a condo in Miami-Dade rose 20 percent to $186,000 in January and that of a single-family home jumped 16 percent to $225,000, Miami Realtors said.
The inventory of condos for resale burgeoned 27.5 percent from January 2013 and was up 4.2 percent from December 2013 levels.
Miami-Dade had 7.2 months of supply of condos for sale in January — not an excessive level, but well above the six months of supply on the market in January 2013.
A six-month supply is typically regarded as a balanced market between buyers and sellers.
While condo listings have increased from exceptionally low levels in 2011, the inventory remains far below the 25,000 condos listed for resale in July 2008, according to Miami Realtors. Back then, there was 63 months of supply.
The selection of single-family homes in Miami-Dade also is on the rise. January brought a 17.1 percent increase in inventory from a year earlier, putting the supply at 5.6 times the monthly sales, compared with 5.3 times sales a year earlier.
Miami-Dade condo closings totaled 1,269 compared with 1,124 a year earlier, while sales of single-family homes rose to 904 closings in January from 823 a year earlier, according to Miami Realtors.
Many condo sellers are setting high — sometimes unrealistic — prices, agents say. Peter Zalewsky, principal of Condo Vultures, which closely tracks South Florida’s condo market, said, “ They’re putting them out there, and if it hits it hits.”
Condo unit owners feel bullish about Miami, said Michael V. Smith, a Realtor associate with Fortune International Realty. Reasons include the city’s burgeoning cultural, entertainment and sports options, its transformation into a work-live-play environment, and its role as an international gateway. Despite residential price gains, it still looks cheap compared to many other big cities.
“Miami is becoming a much more sophisticated, global city,” Smith said. “That in my mind is a gamechanger.”
In Broward County, after several years of very tight inventory, more homeowners are opting to sell, too. Broward condo listings rose 19.6 percent from January 2013 while the inventory of single-family homes for sale jumped 18.3 percent from a year earlier.
That January inventory was 4.3 times the volume of homes sold in a month and 5.5 times the number of condos.
The increase in listings came as Broward’s red-hot housing market cooled in January. The number of existing single-family homes sold in Broward fell 4.3 percent to 989 closings in January and condo sales declined 4.5 percent to 1,132 transactions completed, according to the Greater Fort Lauderdale Realtors.
The median price of a single-family home in Broward rose 16 percent to $260,000 in January and the median condo price jumped 23.8 percent to $117,500 year over year.
The rise in home prices has lifted many residences out of negative equity, enabling more owners to put their properties up for sale without the specter of having to shell out cash to satisfy mortgage obligations. The strong market also encourages prospective sellers to seize the moment.
Nationwide sales of existing homes dropped 5.1 percent in January from a year earlier and were down 5.1 percent from December 2013, marking the slowest pace since July 2012, the National Association of Realtors said.
Still, the nationwide median home price rose 10.7 percent to $188,900 from a year earlier, NAR said.
The housing market in South Florida and across the nation is widely expected to slow down during 2014 after posting two years of rapid gains from the crash.
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