Record breaking sales in residential property market in Miami
The record breaking sales run in the residential property market in Miami, Florida, looks set to continue into the New Year with the latest data showing that condo prices have risen for the third month in a row.
Sales of existing single family homes in the Miami Metropolitan Statistical Area (MSA) rose 41% in October compared to October 2010, according to the 25,000 member Miami Association of Realtors. While sales of existing condominiums increased 63% compared to Statewide sales increased 13% to 13,755 for single family homes and 12% to 6,132 for condominiums compared to October 2010.
Nationally, sales of existing single-family homes, town homes, condominiums, and co-ops rose 1.4% from the previous month and were 13.5% above October 2010, according to the National Association of Realtors (NAR).
‘We are encouraged by the record-breaking performance of the Miami real estate market this year. Rising demand and limited supply is yielding higher average and median sales prices, and we expect to see double digit price appreciation in 2012,’ said Jack Levine, chairman of the Board of the Miami Association of Realtors.
International buyers are rushing to buy, many paying cash. Indeed, the percentage of cash transactions rose to 64%, up 1% compared to the previous month. Cash sales accounted for 43% of single family and 77%% of condominium closings. Nearly 90% of international buyers in Florida purchase properties in cash. Nationally, all cash sales accounted for 29% of sales, reflecting the stronger presence of international buyers in the Miami real estate market.
Prices are also rising. In October, the median sales price for condominiums rose for the third consecutive month, up 8% to $117,900. But the median sales price of single family homes decreased 12% to $174,600 from a year earlier.
‘Miami is an enviable position, leading the nation in the real estate market recovery. International buyers continue to play a major role in fuelling the local market strengthening. Demand for local properties from domestic and foreign buyers will result in the local market outperforming the nation long into the future,’ said Miami Association of Realtors residential president Ralph De Martino.
Statewide median sales prices fell 4% to $131,200 for single family homes and increased 9% to $87,800 for condominiums. The national median existing home price for all housing types was $161,600 in October, down 5.8% from October 2010.
According to Adam Cornwell, who heads up Florida based Feltrim International’s UK office, the US property market now offers real value to foreigners. He said that investors looking to cash in on bank or fund owned homes have contributed to a 13% increase in residential sales in Florida year on year to October 2011.
But he advised foreign buyers to understand the location where they want to buy.
‘We do dissuade against certain ghetto states with dubious schemes, and instead recommend a long term outlook with professional tenants providing strong rental incomes,’ he explained.
He also pointed out that the latest unemployment figures show an upturn in job prospects in Florida and with historically low mortgage rates many people are looking to purchase. But he also believes rental demand will be high as existing stock is being absorbed rapidly and the population of Florida has been growing consistently by 300,000 to 400,000 each year since 2005.
‘That’s 1,000 new residents a day. It’s easy to see where the rental demand comes from. And, with high demand comes high rental prices. They have either stayed the same or increased so property investors can buy at half price but rent at full price,’ he added.