Broward Council of the MIAMI Association of REALTORS

                                                                                                     

                

Miami: THE Global Destination

by | Dec 17, 2014

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Miami is a unique city and world-class global destination. In 2011, the Wall Street Journal featured Miami along with Hong Kong, London, Paris, and New York as The New Global City. And this year Knight Frank's Wealth Report ranked Miami seventh in the world on the list of most important global cities to the world's wealthy. Rankings are based on economic activity, quality of life, knowledge, influence, political power, and number of residents who are high net worth individuals.

Miami offers a strategic location between Latin America and Europe, enviable year-round weather, cultural affinity for all, and an exciting lifestyle. Affordability compared to other world-class markets, strong rental returns, and favorable currency exchange rates for foreign buyers enhance Miami's appeal.

Miami continues to expand, attracting new residents, visitors and tourists and global business enterprises. The local area offers world-class shopping venues, prime restaurants featuring worldwide cuisine, sporting activities and events, all types of entertainment and endless recreational options amidst a refreshing global culture. These factors will continue to attract commerce and domestic and foreign buyers to Miami unlike any other market long into the future.

Miami is also considered a business hub for Latin American companies, for technology, and for logistics and transportation. Building on the momentum of Art Basel and the Perez Art Museum (PAM), Miami has also quickly become a center for international artists, collectors and art dealers.

Consistently the top market for foreign buyers, Miami continues to benefit from rising international buying activity – but also from local, U.S. and international buyers. Miami remains a top market for vacation and second homebuyers, for baby boomers, and for net migration from other states.

2014: Another Record Year?
Following three years of record sales activity, the Miami real estate market continued to strengthen in 2014 while reflecting more balance between buyers and sellers due to increased existing and new construction supply. Despite more new listings finally coming on the market, strong sales continue to drive home values, which have experienced double-digit appreciation since December 2011.

Current market fundamentals create opportunities for both buyers and sellers. While many homeowners have recovered equity lost during the market downturn and can now make a profit if they sell, median sales prices in Miami remain at pre-boom levels of 2004. Those who purchased in the last three or four years are yielding strong returns on their investments.

Demand Continues to Fuel Strong Price Appreciation
Single-family home prices, which again increased in October, remain at affordable 2004 levels despite 35 months of consistent year-over-year increases. Condo prices also increased in October, marking 40 months of growth in the last 41 months.

The median sale price for single-family homes increased 9.1 percent, up to $240,000 from $220,000 in October 2013, while the median sale price for condominiums increased by 8.8 percent to $185,000.

Miami-Dade Sales • 2008 - Oct. 2014

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Miami Properties Selling Fast, Near Asking Price
Miami properties continue to sell rapidly and at nearly asking price, reflecting strong demand. In October, single-family home and condominium sales respectively received 95.3 and 93.7 percent of the original list price, compared to 96.3 percent and 97.5 percent in October 2013. The median number of days on the market for single-family homes sold in October was just 43 days, while that of condos was 58 days.

Distressed Sales Continue to Decline
The percentage of distressed sales again dropped significantly in 2014, as strong demand for bank-owned (REO) properties, improved processing of short sales, and limited short sale supply yield rapid absorption and strong price appreciation. Currently distressed sales account for approximately 34 percent of all closed residential sales in Miami-Dade County, including REOs (bank-owned properties)and short sales, compared to 39 percent a year ago. During the market downturn, distressed sales accounted for two-thirds of all closed transactions.

Cash Sales in Miami Double the National Average
In Miami-Dade County, 55.8 percent of total residential transactions in October were all-cash sales, compared to 60 percent in October 2013. Cash sales accounted for 40.8 percent of single-family and 67.8 percent of condominium closings. Nearly 90 percent of foreign buyers in Florida purchase properties all cash, not included in above percentage. This reflects the much stronger presence of international buyers in the Miami real estate market. Cash sales in Miami are still more than double the national figure of 27 percent, reflecting the strong presence of international buyers in the local market.

Inventory Supply Rises, Creates More Balance
Subsequent to the downturn during the last decade, excess housing inventory locally was absorbed at a record pace, years faster than experts predicted, resulting in limited supply in 2011 and a housing shortage in 2012. In 2014, MIAMI's initiatives to increase inventory and to focus on assisting members to get more listings proved successful along with some additional distressed properties also coming on the market. Seller confidence continues to result in more properties being listed for sale in Miami.

Currently, there are 5.8 and 8.2 months supply of inventory for single-family homes and condominiums, respectively, in Miami-Dade. A healthy market that is balanced between buyers and sellers typically offers six to nine months of supply.

With 17,801 active listings, residential inventory in Miami-Dade County is currently 19.5 percent higher than it was at the end of 2013, when active listings totaled 14,892. Since August 2008, when sales bottomed, existing housing inventory has dropped more than 60 percent, down from 43,095 active listings.

New Construction Market Update
New construction supply is impacting existing condo sales, as consumers are drawn to newly built product. Strong sales in the coastal new construction condominium Miami market (east of I-95) continue to reflect significant demand for new properties, according to the latest New Construction Market Status Report by Cranespotters.com and MIAMI.

At the end of October, there were nine (9) towers that had been completed in 2014 in Miami-Dade County east of I-95, 54 under construction, and 62 are planned but have not begun development. There are also 66 towers that have been announced but not approved.

Of the above projects in Miami-Dade:

  • 84 projects with 98 towers comprising
  • 15,050 units are currently selling
  • 67 percent of the above units have been sold
  • The mean price per square foot of these units is $855, compared to $850 last month

Global Media Exposure
The MIAMI Association of REALTORS® strategically positions its members and the local market for continued strengthening and success through unprecedented global media exposure and strategic relationships with more than 125 worldwide partner organizations. As the "Central Address" for South Florida real estate, MIAMI is the source for accurate market statistics to Realtors®, the media, and the consumers.

MIAMI is featured in hundreds of leading media outlets – including television, radio, print and electronic – throughout the world, generating millions of dollars in coverage for you and our market!

 

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