Home sales rise by 12%, prices up 13% in Greater Miami
By Frank Norton
The number of single-family houses sold in Greater Miami increased 12% in April compared to the same month a year ago while home sales statewide jumped 17%, according to the Florida Association of Realtors.
The report attributes the spike in demand for homes to historically low interest rates, a steady stream of retirees and the market's weak performance.
South Florida real estate consultant Michael Cannon said the most dramatic local trend is not the number of homes sold, but the exorbitant prices those homes are fetching.
Mr. Cannon, managing director of Integra Realty Resources-AREEA South Florida, a research firm, attributes the price spike to its paucity of usable land relative to the global market of buyers that want to migrate to or invest in the region.
According to the report, the median home price in Miami jumped 13% year-over-year in April.
Larry Kahn, president of Miami-based Lowell Homes said April's jump in home sales reflects the increased profitability of residential real estate as an alternative investment as much as it does increasing land scarcity. He and other analysts said they think the trend will continue as long as the market remains weak and interest rates low.
"If you look at Dade and southwest Broward, you'll find a tremendous increase in the cost of homes. And it's not increases in labor and building materials, it's land costs," Mr. Kahn said.
He said home builders may begin shifting their product pipeline toward higher density units "back east," as unused land space in the western portion of the tri-county area diminishes.
"When that gets used up," Mr. Kahn said, "I think we'll see a lot more townhouses, villas and condos going up in urban areas."