Foreign buyers continue to strengthen property market in Miami

The Miami real estate market, which is increasingly popular with overseas buyers, continued to strengthen in February, as prices again increased despite limited inventory. The latest data from the Miami Association of Realtors shows that condo prices have now increased for 20 months in a row and house prices for 15 consecutive months.

The organisation said that strong demand coupled with dwindling supply continues to fuel significant price appreciation. The median sales price of condos was up 26.9% to $165,000 compared to a year earlier and 6.5% month on month. While the median sale price of single family homes rose 10.9% to $194,000 year on year it remained the same compared to the previous month. State wide median sales prices in February increased 12.8% to $150,000 for single family homes and 21.1% to $115,000 for condominiums.

Miami-Dade County residential sales increased 6.5% in February compared to a year earlier. The sales of existing single family homes were up 6.8% and condos up 6.3% year on year. ‘Demand for housing in Miami from both foreign and domestic buyers continues to deplete local inventory and to drive significant price appreciation,’ said Natascha Tello, chairman of the board of the Miami Association of Realtors. ‘Miami remains a top market for net migration from other states in addition to being the top market in the nation for foreign buyers. Such demand will continue to strengthen Miami real estate long into the future,’ she added.

It is a pattern that is reflected in the rest of the state with overall Florida sales of existing single family homes increasing by 10.3% in February and condos by 7% compared with a year ago. ‘In Miami, we continue to see the results of great demand for residential real estate, particularly for homes and condominiums listed in the lower price ranges,’ said Fernando Martinez, Miami Association of Realtors residential president.

‘Inventory listed below $200,000 is declining very rapidly and by a higher percentage margin than that of properties in higher price ranges. Still over the last few months we have experienced an uptick in luxury home sales, properties listed above $600,000,’ he added.

Active listings at the end of February were 8.1% below what they were in February 2012, when the market was already experiencing a housing shortage. Inventory of single family homes dropped 10.2%, while that of condos decreased 6.6%. Currently, there are 5.3 months of supply of single family homes and 5.6 months of supply of condos in Miami-Dade. Strong demand for bank owned properties and improved processing of short sales continues to yield absorption of distressed listings and to contribute to price appreciation, the associations said.

Quote from PropertyCommunity.com : “The performance of the Miami residential real estate market continues to create opportunities for sellers, as limited supply and strong demand consistently yield significant price appreciation, according to agents”

In January, 42.2% of all closed residential sales in Miami-Dade County were distressed, including bank owned properties and short sales, compared to 53.6% in February 2012 and 43.2% the previous month. Data on cash sales suggest there is an increase in international buyers with some 66.8% of total closed sales in February all cash sales, compared to 65.5% in February 2012 and 64.7% the previous month. Nearly 90% of foreign buyers in Florida purchase properties for cash.

‘This reflects the much stronger presence of international buyers in the Miami real estate market. By comparison all cash sales nationally accounted for 32% of transactions in February, up from 28% the previous month and down from 31% in February 2012,’ said the association.