Pulled under by a weight of disappointing condo resales and rising condo inventory, the volume of overall real estate sales in Miami-Dade County sank in September, while prices still powered ahead.
Overall, the number of existing home and condo sales in Miami-Dade County decreased 14.7 percent percent compared with September 2015, according to a monthly report released Thursday by the Miami Association of Realtors.
(The Broward County’s Realtors association had not released its report late Thursday.)
A lack of affordable housing for locals and a lack of foreclosure inventory for investors continue to slow Miami’s real-estate market, which is also seeing a drop-off in the number of foreign buyers burned by the strong dollar.
Still, Christopher Zoller, incoming 2017 chairman of the Miami Association of Realtors, cautioned that September is traditionally a slow month for real estate. Buyers also may be hesitating because of the presidential election and uncertainty about when the Federal Reserve will raise interest rates. After these two events, “the buyers will come back on track,” said Zoller, who has been with EWM Realty International for 26 years.
Zoller said he’s also been seeing some renewed interest from France, Great Britain, Sweden and Canada. “Colombians are looking to us once again too, as well as Argentinians.”
With a glut of luxury condo offerings in Miami-Dade, condo resales fell to 1,064 in September, down 18.8 percent from the same month in 2015, the Realtors’ group found. In July, just two months earlier, condo resales were down 24.7 percent. Signaling a buyer’s market for condos, inventory for condos was up 20.5 percent year over year. Cash is still king in the condo market, with 57.4 percent of existing condos sales transacted in cash.
Single-family sales of existing homes were also down in the report, falling to 1,066 in September, a 10.8 percent decrease from September of 2015.
Prices were up across the board. The median sales price for single-family homes in Miami-Dade jumped 10.4 percent over September 2015, to $314,500. Yet despite the increases, Miami properties remain at 2005 price levels, the Realtors group said.
Median condo prices hit $219,000, up from $200,500 a year ago, a growth of 9.2 percent. The median means half the properties sold for more and half for less. Typically, prices drop six to nine months after sales begin to decline, said Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach.
“The market is in transition – the higher end will face challenges in 2017. ... We’ll begin to see prices come down later this year or early 2017, especially in high-end condos where we have an over-saturation of new condos on the market,” McCabe said. But with a declining supply of homes at the lower and middle of the market, demand may continue to push prices up, pricing out more residents or people looking to move to the Miami area, he said.
Indeed, in Miami-Dade, foreign investors have driven up prices beyond what many locals can pay and developers have built almost exclusively for the luxury market. As a result, while inventory in higher-end condos rose, the inventory of single-family homes priced below $300,000 fell 32.4 percent percent over the last year, according to the Realtors’ association. That adds up to a strong market for single-family homes in the mid-market range.
The inventory of single-family homes has slipped to a 5.8-month supply — also pushing up prices. The mid-market — single family homes listed between $300,000 and $600,000 — posted a 5.1 percent increase in sales.
Nationally, sales of previously owned homes rose in September after two months of declines as the inventory of homes for sale continued to shrink. Existing-home sales rose 3.2 percent to a seasonally adjusted annual rate of 5.47 million, the National Association of Realtors said Thursday. That was 2.8 percent higher than a year ago.
The median sales price increased 5.6 percent from September 2015 to $234,200. At the current pace, it would take 4.5 months to sell the houses on the market, down from 4.6 months in August; the Realtors group has said that less than a five months’ supply indicates a tight market.
What is lacking is inventory, said Lawrence Yun, the national association's chief economist. “Unfortunately, there won't be much relief from new home construction, which continues to be grossly inadequate in relation to demand.”
Nancy Dahlberg: @ndahlberg.