Home sales record, but not prices
It’s almost like the good old days. Almost.
Sales of houses and condominiums are brisker than they’ve ever been – even compared to the height of the real estate boom between 2005 and 2007 – but prices are still lagging.
“We’ve had record sales in 2011 and 2012 and I think we’ll have that again this year,” said Lynda Fernandez, spokeswoman for the Miami Association of Realtors. “Right now we’re selling more properties than ever.”
Single-family home sales surged 27.3% in July, with 1,227 sales, compared to 964 a year earlier. It was the highest number of monthly transactions for houses in the county since the height of the boom, according to information from the 26,000-member association. Brokers sold more condominiums, too, closing about 200 more deals than a year ago.
“The Miami real estate market continues to thrive as demand for housing intensifies and increasing inventory remains insufficient. Miami is a global city that is not surprisingly attracting worldwide attention on many fronts,” said Natascha Tello, chairman of the board of the Miami Association of Realtors. “Residents, visitors, tourists and business enterprises want to be in Miami and experience all that our unique and vibrant city and market offer. This attention is driving our real estate market and our economy.”
Home sales passed 2005’s levels by 4% two years ago when nearly 25,000 properties changed hands. And last year’s numbers improved another 4% over 2011’s.
Buyers purchased 11,463 single-family houses last year, compared to 10,625 in 2011 – a 7.9% increase, data from Southeast Florida Multiple Listing Service and the Miami Association of Realtors show. Sales of condominiums also rose during that period, climbing 1.2%, thanks to 16,383 transactions last year.
But a full recovery is still elusive.
“My volume has increased significantly, but the prices are not there yet,” said Jose Serrano, a broker with Keller Williams Realty. “Prices have adjusted quickly, going up and up, because the inventory is tight. But the increase is sensible because banks are not going crazy. They’re not lending to everyone anymore. You really need to qualify, so there’s more stability.”
The result: today’s prices are nearly 40% below those commanded at the height of the boom. Last July, for instance, the median sale price for a stand-alone house was 39% below the peak. For condos, it was about 33% lower.
That’s despite 20 consecutive months of appreciation for both single-family homes and condominiums. Single-family houses are selling for $406,532 on average – up 24.9% since last year – and condos are averaging $323,338, a 20.9% jump.
The median sale price of single-family houses is also up, growing 25.7% to $230,000, while condos jumped 33.3% to $180,500. It’s a strong performance for the county, where prices are outpacing state and national numbers. Statewide, for example, the median sale price for single-family house was $179,500 in July – up 20% from the previous year – and $129,000 for townhouse-condo properties, up 22.9%.
“It’s an exciting time for Miami real estate,” said Fernando I. Martinez, residential president of the realtors’ association. “Miami has matured into a global, urban city that offers a very attractive lifestyle with endless opportunities for work, leisure and cultural activities, adding great value to our market. Buyers and investors realize Miami will continue to generate housing demand and are taking advantage of the local affordability and the potential for profitability.”
But despite “amazing numbers” on pricing and volume, brokers such as Mr. Serrano are keeping their eyes on interest rates.
“Things are trading and they’re trading hard, but that’s the only real fear we have,” he said. “We have to keep the interest rate below 5%. Around 5.5% would be the max. If it goes beyond that, people won’t be able to afford it.”
Under current conditions, his deals close in about 45 days, compared to lagging for five months in the years after the boom.
“The real point here is you have to price correctly, considering all factors,” he said. “Most agents now at taking diligent care with pricing.”