Inflation, Interest Rates Begin to Slow Miami Residential Sales in April
-
Loading... - annabelle ibrahim
- 23 May 2022
- 302 Views
- 0 Like
- 0 Comment
According to the Miami Association of Realtors, despite rising interest rates and inflation, Miami-Dade County real estate still posted its second-best April sales month ever.
"The recent rise in mortgage rates should eventually temper the velocity of Miami's record-setting real estate market appreciation, however ultimately inventory will tell the tale," MIAMI Chairman of the Board Fernando Arencibia Jr. said. "Although we see opportunities for buyers to have more choices, with a slight increase in days on market and fewer bidding wars, the lack of equilibrium between demand and supply indicates that as we gradually head to a more balanced market Miami's real estate sector should remain strong."
Second-Best April Sales Month in History
Miami total closed sales in April 2022 performed above the level they were leading up to the pandemic despite higher mortgage rates, lower supply and higher sale prices.
Miami's April 2022 total home sales count decreased year-over-year (3,445 in April 2022 vs. 3,960 in April 2021) but performed significantly higher than every April outside of April 2021.
The April 2021 sales total surged so high because it benefited from 2.5% mortgage rates, higher supply (particularly in condos) and pandemic-driven demand. Miami has historically averaged about 2,306 total home sales in April, compared with 3,445.
Many of the homes that sold in April 2022 had their rates established in February and March when mortgage rates were at 4%. 2018 marked the last time mortgage rates were at this level. Miami April 2022 total home sales finished 32.4% higher than Miami's total in April 2018.
The April 2022 total home sales count finishes as the seventh-highest total home sales month in Miami-Dade County history. The top-10 highest total sales months have been achieved in the last two years. June 2021 remains No. 1 with 4,057 total home transactions in a single month.
Miami existing condo sales decreased 7.4% year-over-year, from 2,376 in record-breaking April 2021 to 2,199 in April 2022. Single-family home sales decreased 21.3% year-over-year, from 1,584 in record-breaking April 2021 to 1,246 in April 2022. Sales declined because it's in comparison to a record-setting 2021 market that had 2.5% mortgage rates, higher supply and pandemic-driven demand. The April 2022 condo and single-family home sales totals are higher than every other April outside of April 2021.
Miami Luxury Condo Sales Stay Even; Mid-Market $400-600K Condo Transactions Jump
Miami existing condo luxury ($1-million-and-up) sales stayed about even in April 2022, down a negligible 0.3% to 313 transactions, which are in a record-high range. Miami single-family luxury transactions decreased 31.2% year-over-year to 247 sales in April 2022 because of low inventory.
Miami luxury condos boast an inventory of 5.8 months of supply, portending more future growth in the sector given the high demand. There are 4 months of supply in luxury single-family homes. Luxury months of supply continue to trend downward for all property types because of the robust demand.
Homebuyers leaving tax-burden states to purchase in Florida (no state income tax), new-to-market firms moving here, low interest rates, the appeal of property as an inflation hedge, rising wages and accrued savings in lockdowns, strong equity market performance, a reassessment of housing needs and lifestyles because of the pandemic and expansion of remote work are all factors driving South Florida real estate demand.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers are coming here for the vaccine and purchasing property.
Vaccinated foreigners were allowed to resume travel to the U.S. back in November 2021 and that is leading to more international investment in South Florida - the No. 1 destination in the U.S. for foreign buyers. Global buyers purchase in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures, along with all our amenities.
Miami existing condo sales priced between $400K to $600K increased 15.8% year-over-year to 404 transactions in April 2022. Miami single-family homes priced between $400K to $600K decreased 11.1% year-over-year to 463 transactions in April 2022, due to lack of inventory. Read More…
