MIAMI — Miami-Dade County real estate has already posted the 4th best total home sales year ever and with another calendar month to go it is poised to end 2022 as its second-biggest sales year ever, according to November 2022 statistics from the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“South Florida real estate is different from many U.S. markets in that our housing demand continues to be fueled by in-migration, both domestic and international,” MIAMI Chairman of the Board Fernando Arencibia Jr. said. “This influx of people and companies moving into our region, coupled with the ratio of cash buyers which is nearly double the national average should continue to shield Miami from the impact of high mortgage rates as the Fed continues its mandate to tamper inflationary pressure.”
The 30-year fixed mortgage rate, which hit north of 7% earlier this fall, has declined for five consecutive weeks and is now roughly 1% lower than the recent peak in rates. But it is important to note that November 2022 statistics don’t reflect these lower rates as November 2022 purchases were agreed to in September and October when rates were higher.
“The decline in mortgage rates means a more robust market for home sales in 2023,” MIAMI REALTORS® Chief Economist Gay Cororaton said. “I expect home sales to post some uptick in 2023 compared to 2022 as mortgage rates continue to head downwards to 6% in 2023 amid decelerating inflation.”
Two forward-looking national data points have turned positive in recent weeks, a strong sign as we head into 2023. National mortgage purchase applications have hit seven straight weeks of positive trend data and the HMI Builders confidence index went positive on Dec. 19.
Miami Projected to Post Second-Biggest Sales Year Ever
The Miami-Dade County real estate market has already sold 29,848 total home sales (or 84 transactions per day) through November 2022, putting it on pace to be the second-best year ever for total annual sales behind historic 2021.
In comparison to a record November 2021, Miami November 2022 sales decreased 40.7% year-over-year, from 3,021 to 1,791, because of high mortgage rates and low inventory.
While overall inventory is on the rise, most of the growth in listings is at the top end or luxury segment of the market. Miami single-family inventory in the $400K to $600K price range, for example, is at 2.7 months of supply, well below a balanced market (6 months).
Single-family home sales decreased 38.5% year-over-year, from 1,168 in record-breaking November 2021 to 718 in November 2022, due to lack of inventory and rising mortgage rates. Miami existing condo sales decreased 42.1% year-over-year, from 1,853 record-breaking November 2021 to 1,073 in November 2022, due to lack of inventory and rising mortgage rates.
Miami November 2022 Sales Are Near Pre-Pandemic Totals
November 2021 sales surged so high because of historic-low mortgage rates and pandemic-fueled homebuying. Mortgage rates averaged 3.07% in November 2021.
Mortgage rates are more than doubled today, but November 2022 Miami sales remain near pre-pandemic sale totals despite today’s higher prices and rates. November 2019 (2,033 transactions) and November 2018 (2,081 sales) figures in Miami are not far from its November 2022 transactions.
The Fed, which has made multiple hikes to the fed funds rate, is intent on slowing 40-year high inflation. While the Fed doesn’t set mortgage rates, it affects them through its conduct of monetary policy.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage averaged 6.31% as of December 15. That’s down from 6.33% last week, but up from 3.12% one year ago.
Miami Real Estate’s Strong In-Migration & Other Market Fundamentals
- Miami-Dade County out-of-state driver license exchanges remain up double digits for relocating New Yorkers, Californians, New Jerseyans and more, according to Q3 2022 data from Florida Department of Highway Safety and Motor Vehicles (FLHSMV). For instance, 80% more New Yorkers exchanged their driver licenses for Miami-Dade ones from Q4 2020 to Q3 2022 (5,355) versus the average annual number of license exchanges observed from 2016-19 (2,967).
- Global companies continue relocating to Miami, such as Citadel, a multinational hedge fund that manages $57 billion in assets and is developing a $1 billion Miami office tower with plans to have 1,500 employees in 10 years.
- One of the strongest job markets in the country. As of October 2022, the unemployment rate in the Miami-Fort Lauderdale-West Palm Beach metro area was 2.3% compared to 3.7% nationally.
- Miami prices keep rising (11 consecutive years of price appreciation) and homes keep selling fast (31 days on average).
- Global buyers are returning in mass to America’s top international market. Foreign homebuyers purchased $6.8 billion of South Florida residential properties in 2022, up 34% from $5.1 billion in 2021, according to our 2022 MIAMI REALTORS® Global Study.
- Miami’s percentage of cash buyers (42.3%) is significantly higher than the national average (26%). Nearly 60% of Miami-Dade luxury buyers pay all-cash.
- Distressed sales are statistically insignificant, reflecting a healthy market.
- Demographic shifts (Millennials reaching prime home-buying age and surging senior/retiree population growth)
- High percentage of workforce working remotely favors the Miami market, where many have relocated to live, work and play because of our lifestyle, weather and more.
South Florida Home Prices Are Lower Than Many Other U.S. Metros
Miami-Fort Lauderdale-West Palm Beach’s median home price ($570,000) is significantly lower than many other major markets such as San Francisco-Oakland-Hayward, CA ($1.3 million), San Diego-Carlsbad, CA ($900,000), Los Angeles-Long Beach-Glendale, CA ($893,200), Seattle-Tacoma-Bellevue, WA ($741,300), Boston-Cambridge-Newton, MA-NH ($698,900), Denver-Aurora-Lakewood, CO ($666,000), New York-Jersey City-White Plains, NY-NJ ($616,300), and Washington-Arlington-Alexandria, DC-VA-MD-WV ($581,300), according to NAR’s Q3 2022 Metropolitan Media Area Prices report.
Miami-Dade County single-family home median prices increased 9.4% year-over-year in November 2022, increasing from $502,750 to $550,000. Miami single-family median prices have risen for 132 consecutive months (11 years), the longest running-streak on record. Existing condo median prices increased 14.2% year-over-year, from $346,000 to $395,000. Condo median prices have increased in 133 of the last 138 months.
While median prices have increased nationally so has house-buying power because of a long-run decline in rates before March 2022 and the slow, but steady growth of household income. West Palm Beach (No. 5) and Miami (No. 6) ranked among the Top-10 U.S. metros where homebuyer income grew the most during the pandemic via Redfin report.
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Inventory for Miami single-family homes (4 months) and condos (4 months) are low. Also, one of the supports for home prices is rents and rents are rising strongly.
Locally, the greater share of Miami luxury sales is also part of the reason for the large year-over-year increase in median prices.
Miami Total Active Listings Rise for Second Consecutive Month
Total active listings at the end of November 2022 increased 11.9% year-over-year, from 9,984 to 11,178.
Inventory of single-family homes increased 52.9% year-over-year in November 2022 from 2,805 active listings last year to 4,288 last month. Condominium inventory decreased 4% year-over-year to 6,890 from 7,179 listings during the same period in 2021.
New listings of Miami single-family homes decreased 13.8% to 1,236 from 1,434. New listings of condominiums decreased 17.8%, from 2,111 to 1,735.
Months’ supply of inventory for single-family homes increased 90.5% to 4 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums increased 8.1% to 4 months, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Nationally, total housing inventory at the end of November was 1.14 million units, which was down 6.6% from October, but up 2.7% from one year ago (1.11 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, which was identical to October, but up from 2.1 months in November 2021.
Miami Real Estate Posts $201.5 Million Local Economic Impact in November 2022
Every time a home is sold it impacts the economy: income generated from real estate industries (commissions, fees and moving expenses), expenditures related to home purchase (furniture and remodeling expenses), multiplier of housing related expenditures (income earned as a result of a home sale is re-circulated into the economy) and new construction (additional home sales induce added home production).
The total economic impact of a typical Florida home sale is $112,500, according to NAR. Miami-Dade County sold 1,791 homes in November 2022 and had a local economic impact of $201.5 million.
Miami total dollar volume totaled $1.3 billion in November 2022. Single-family home dollar volume decreased 40.14% year-over-year, from $1 billion to $641.9 million. Condo dollar volume decreased 37.5% year-over-year, from $1.1 billion to $706 million.
Miami Distressed Sales Remain Low, Reflecting Healthy Market
Only 1.7% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 0.8% in November 2021. In 2009, distressed sales comprised 70% of Miami sales.
Short sales and REOs accounted for 0.1% and 1.6% year-over-year, respectively, of total Miami sales in November 2022.
Miami’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented approximately 2% of sales in November, identical to November 2021.
Miami’s Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 17,009 in November 2022, down 38.2% year-over-year, while existing condo-townhouse sales totaled 7,084, down 38.9%. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions waned 7.7% from October to a seasonally adjusted annual rate of 4.09 million in November. Year-over-year, sales dwindled by 35.4% (down from 6.33 million in November 2021).
The statewide median sales price for single-family existing homes was $400,000, up 9.6% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $307,000, up 12.3% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, the median existing-home price for all housing types in November was $370,700, an increase of 3.5% from November 2021 ($358,200), as prices rose in all regions. This marks 129 consecutive months of year-over-year increases, the longest-running streak on record.
Miami Real Estate Attracting Near List Price
The median percent of original list price received for single-family homes was 95.3% in November 2022, down 3.2% from 98.4% last year. The median percent of original list price received for existing condominiums was 96.3%, down 0.8% from 97.1% last year.
The median number of days between listing and contract dates for Miami single-family home sales was 31 days, up from 20 days last year. The median time to sale for single-family homes was 74 days, a 12.1% increase from 66 days last year.
The median number of days between the listing date and contract date for condos was 35 days, down 2.8% from 36 days. The median number of days to sale for condos was 74 days, a 7.5% decrease from 80 days.
Miami Cash Sales 62.7% More than National Figure in November 2022
Cash sales represented 42.3% of Miami closed sales in November 2022, compared to 38.4% in November 2021. About 26% of U.S. home sales are made in cash, according to the latest NAR statistics.
Cash buyers are not deterred by rising rates. The high percentage of cash buyers reflects Miami’s top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash as well as some moving from more expensive U.S. markets who can buy more with their profits from real estate sales.
Cash sales accounted for 53.9% of all Miami existing condo sales and 24.8% of single-family transactions.
To access November 2022 Miami-Dade Statistical Reports, visit http://www.SFMarketIntel.com
Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.
About the MIAMI Association of Realtors®
The MIAMI Association of Realtors (MIAMI) was chartered by the National Association of Realtors in 1920 and is celebrating 102 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations: MIAMI RESIDENTIAL, MIAMI COMMERCIAL; BROWARD-MIAMI, a division of MIAMI Realtors; JTHS-MIAMI, a division of MIAMI Realtors in the Jupiter-Tequesta-Hobe Sound area; MIAMI YPN, our Young Professionals Network Council; and the award-winning MIAMI Global Council. MIAMI REALTORS represents nearly 60,000 total real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S. and has official partnerships with 242 international organizations worldwide. MIAMI REALTORS® has launched its new YPN Global and will host the first-ever YPN Global Congress on Feb. 12-15, 2023, in Dubai. MIAMI has been selected to host the prestigious FIABCI World Congress on June 5-9, 2023. MIAMI’s official website is www.MiamiRealtors.com