Miami Sales Down But Prices Up

It’s a trend that can’t last forever: Home sales in Miami-Dade County are falling, but prices are still going up.

Total existing home sales slid to 2,435 in August, down 10.4 percent annually, according to data from the Miami Association of Realtors. Single-family homes — down 7.2 percent — fared better than condos, which fell 13.3 percent. (Existing condos are competing with a glut of new luxury construction.)

Two factors are contributing to the residential slowdown, which comes after three years of heady sales: First, a strong dollar is crippling the foreign buyers who drove South Florida’s latest real estate boom. Second, investors and flippers have already snapped up much of Miami’s shrinking foreclosure inventory, which ballooned during the recession and fuelled sales.

Foreclosures fell from 25.1 percent of all sales in August 2015 to 18.9 percent of sales in August 2016.

Meanwhile, prices are still rising. In Miami, single-family home prices rose to $295,000, up 4.6 percent year-over-year. Condo prices hit $214,250, a 2.5 percent annual gain. That makes sense, experts say. For now.

“Historically, even after there has been a noticeable change in the market, home prices continue to increase for six to 12 months despite the shift in supply and demand,” said Jack McCabe, a real estate analyst. “If you see a big change in the real estate market, it takes a long time to sell. It’s not like stocks or commodities.”

Sellers are already starting to respond, especially in the luxury market, said Ron Shuffield, president of EWM Realty International.

“We’re seeing a lot of people reducing prices as inventory goes up and sales go down,” Shuffield said. About 37 percent of Miami-Dade listings over a million dollars have seen price reductions since Jan. 1, according to research conducted by EWM.

“The message we’ve been taking to our sellers since last August is that we’re returning to a more normal market,” Shuffield said. “These are still great numbers that we’re seeing.”

The overall trends suggest single-family homes remain a seller’s market while condos are firmly in buyers’ territory.

Realtor Jeff Morr said he believes the U.S. presidential election might be playing a role in the slowdown and that important indicators, including low interest rates, remain positive.

Miami set an annual record for residential sales in 2013, and came close again in 2014 and 2015. Coupled with flat wages, the real estate boom has helped make Miami one of the least affordable cities in the nation.

I think that the election year is throwing off some people’s confidence, more the media than anyone else. “We still have foreign buyers coming to Miami. We’re a really undervalued market compared to other similar markets,” adds Morr.