July 22, 2014

Miami-Dade prices still climbing, but there’s pressure on sales of existing condos

The spurt of condo construction is putting pressure on sales of existing condo units, and the number of sales has declined three months in a row.

Miami-Dade County’s housing market continued to log price and sales gains, but one key sector, existing condominiums, is waffling.

Sales of existing condos have slumped for three months in a row in Miami-Dade, and prices have moderated in 2014 after years of torrid gains, according to the Miami Association of Realtors.

Competition from new condo construction projects, tough mortgage financing rules and a long string of price increases that have eliminated the bargain image have conspired for months to create headwind in Miami-Dade’s existing condo market.

Sales of existing condos fell 3.8 percent in June from a year earlier to 1,443 closings and fell 3.1 percent from May.

The median price of an existing condo in Miami-Dade rose 2.6 percent to $190,000 year over year and was up 1.9 percent from May.

“We’ve seen a real slowdown in buyer activity in the past few months,” said Mark Zilbert, president and CEO of Zilbert International Realty in Miami Beach, whose firm focuses on higher-end coastal properties.

Cash purchases — which often signal investor deals — have been on the decline.

The slack period in condo sales comes as single-family home prices keep going up in Miami-Dade, though not at the heated pace of recent years.

In June, the median price of a single-family home in Miami-Dade rose 6 percent to $243,700 from a year earlier and dipped 2.5 percent from May’s level of $250,000, the Miami Realtors said.

Single-family home sales in Miami-Dade rose 9.5 percent from a year earlier, with 1,280 closings in June, up 5.4 percent from May, the Miami Realtors said.

While the price gains show the housing market still has positive momentum, they’re far below the jaw-dropping increases posted in earlier years.

“It’s a more moderate growth after years of double-digit appreciation,” said Lynda Fernandez, a spokeswoman for Miami Realtors.

Other signs the market is shifting: The median period of time to sell a condo has increased to 61 days from 44 a year ago, and listings are fetching 94.5 percent of original asking price on average, down from 96.9 percent a year ago, the Miami Realtors said.

“I don’t think there is anything to worry about at the moment,” said Francisco Angulo, managing broker of Coldwell Banker’s Coconut Grove office. “Wall Street [similarly] goes up and down. We shouldn’t be panicky.” A bit of stabilization after the protracted run-up in prices is “healthy,” said Angulo, who is also residential president of Miami Realtors.

Miami-Dade condo prices have risen year over year for 36 months in a row, while single-family home prices have posted annual gains for 31 consecutive months. Even so, the median condo price is 36 percent below its 2007 peak of $272,000 and single-family homes are still down 35 percent from 2007.

The spurt in condo construction is providing stiff competition for the existing inventory, Realtors say. And a lot more unit owners have put their condos on the market to take advantage of the price increases.

“Increased inventory is generating more moderate price growth,” Liza Mendez, chairman of the Miami Realtors said of the overall market.

Miami-Dade had a 5.5-month supply of single-family homes in June — still slightly below the 6-month supply considered to be a market balanced between buyers and sellers. But the supply of existing condos swelled 34.4 percent to 10,967 units — a 7.8-month supply. That gives buyers more leverage to push for price cuts. Zilbert said among higher-end coastal condos, there is 12 to 14 months’ supply of inventory.

Meanwhile, in Broward County, home sales and prices headed higher in June.

The median price of an existing single-family home in Broward rose 5.7 percent to $280,000 from a year earlier, according to the Greater Fort Lauderdale Realtors. The median price was at the same level in May.

Sales of single-family homes in Broward rose 5.4 percent in June to 1,425 closings and were up 6.3 percent from May.

The median price for an existing condo in Broward rose 23.8 percent to $130,000 in June from a year earlier and was up 3.1 percent from May, the Fort Lauderdale Realtors said.

Sales of existing Broward condos rose 10.1 percent to 1,496 closings in June, a level flat with May.

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