Miami’s Real Estate Market is Going Strong
According to the Miami Association of Realtors, 2018 started off great for Miami real estate. January showed an increase in the sales of condominiums, single-family homes, and even luxury properties valued at and over $1 million.
Comparing January of 2018 to January of 2017 shows us an increase of 5.1 percent in sales of residential properties in Miami-Dade. Last year’s 1,731 to this years’ 1,820 is a $791.3 million increase in sales. That number doesn’t even include the multi-million dollar properties sold during January.
Another great indication Miami market is going strong is a majority of properties sold at or very close to the initial asking price. This means homes are selling quickly. The average single-family property for sale is going into a contract for just 47 days after its initial listing. The time on the market shows a marked decrease from last year’s average of 61 days on the market before a contract. Additionally, closing deals this year is only taking 98 days instead of the previous year’s average of 113 days.
Apartments are still taking slightly longer than single-family residences, but even they are taking less time than last year, ten days less on average.
The quick closing of properties can be partially attributed to the decrease of properties on sale. January of 2018 has only 6,255 single family homes for sale as opposed to the previous January’s, with 6,590 homes on the market.
The available properties have steadily been dropping over the past 5 months, which is really turning the Miami market into a favorable place to sell. While single-family houses are showing a good promise, apartments in the area have a 14-month inventory. Which is far above the balanced market of six to nine months of inventory.
The largest opposition to the sale of condos is the limitations on finding financing. Only 12 of the 9,307 condominium complexes in Miami-Dade and Broward are approved for financing from the Federal Housing Administration. The limitation on that first-time home buyers loan indeed presents an issue for some potential purchasers.
Prices of homes have been increasing for the past 74 months and show no sign of stopping. The average price of a single-family home is currently sitting at $330,000 in the area. Condos have been following suit, and the area average is $230,000.
While the national sale of homes seems to be decreasing overall, Florida is making its trend, with sales still rising 5.9 percent for condos compared to the previous year. A majority of that number is made up of residential numbers, showing only 9.9 percent in January of 2018 considered properties in trouble, bank owned, or short sale properties. That 9.9 percent is a decrease from last year’s 12.7 percent and a whopping 70 percent in 2009.
Cash sales account for almost half of sales on the real estate market, with 42.2 percent of sales having no mortgage. That number is nearly twice the national average. The high amount of cash buyers attests to the foreign buyers and investors Miami attracts. A majority of condo sales are in cash, due to the lack of financing approved for condos.
The Federal tax reform set a deduction cap for income and sales and property taxes at 10,000. The newly presented cap is encouraging US residents to relocate to states such as Florida – which has zero state income tax, to cut down on cost of living.