Miami in Review – Q2 2009
MIAMI MARKET ACTIVITY JUMPS
During the second quarter of 2009, we experienced a substantial increase in the number of closed sales of residential properties in Miami. Year-to-date the number of closed sales jumped from 3,469 to 4,735 in single family homes and from 3,303 to 5,022 condominiums units sold. This represents a year-over-year increase of 44 percent, or 2,985 closed sales.
Closed sales - The total number of closed sales in Q2 increased by 26.8% or 1,154 closed sales over Q1. This increase was consistent in both the number of condo and single family residences ["SFR "] sold. The percentage of closed sales that were distressed sales [foreclosures and short sales] decreased slightly from 73 to 70 percent in single family residences and from from 64.5 to 63 percent of total closed sales in condos.
Average Sale Price- The median sale price of SFR’s decreased from $180,000 in Q1 to $175,000 in Q2, which represents a decrease of 2.7 percent. The median sale price of condominiums decreased from $144,250 in Q1 to $130,375 in Q2, which represents an decrease of 9.6 percent.
Days on the Market – While the average number of days remained constant in single family homes, it decreased from 84 days to 74 days in Q2 in the condo market. This is consistent with the increase in demand for condominiums as prices become more attractive in the Miami area.
Increase in Inventory- With such a large of supply already in the market, the number of new properties actually increased in both SFR’s and condos. The increase in the number of new properties on the market increased by approximately 50 percent over the first quarter, of which the majority were new short sales or pre-foreclosures.
Clearly there is more downward pressure on the prices of condominiums as financing remains scarce, maintenance fees continue to sky rocket, and the supply of new construction condominiums continues to increase.
FORECLOSURE STATISTICS
Source: Miami Dade Clerk of the Court
Despite hints of the housing industry stabilizing in several markets, more than 360,000 homes received a foreclosure filing in July 2009. This represents an increase of 7 percent for the month and a 32 percent increase over July 2008 in the U.S. housing market.
In Miami, we continue to experience record high numbers of foreclosure filings. From January through June 2009, we have had 34,679 mortgage foreclosures filed versus 25,117 mortgage foreclosures filed in 2008, or an increase of 38 percent.
SOFT LUXURY MARKET
The number of closed sales in the $500,000 and above price range has slowed considerably over the same period last year. The median sale price was $727,500 in Q2, versus $773,000 in Q1. Additionally, properties are staying longer on the market as the median number of days on the market has increased from 129 to 145 as well.
Buyers continue to look for value in this segment as the percentage of sale price to list price remains far apart. There also remains this “mystery” shadow inventory of luxury properties that has yet to be taken back by the banks. It’s out there and perhaps more pervasive than what most recognize.
TWO-TIERED MARKET
Until these thousands of foreclosures are turned over and mortgages become more readiliy available, I think that we will remain in a two-tier market. There will be continued competition in the lower tier, while the upper tier is going to have to discount considerably to attract a ready, willing and able buyer.
Lower Tier - A horde of buyers and investors with cash that are aggressively chasing distressed properties priced at under $150,000. Often the original asking price is purposefully priced low to generate lots of attention and multiple offers.
Upper Tier – A narrow field of interested parties looking for a substantial discount off asking price, and the higher the asking price, the more pressure to discount. A number of these cautiously “optimistic” buyers are paying in cash, but many are also looking to leverage and take advantage of historically low mortgage rates.
Are you looking for a Miami or Miami Beach property at a deep discount? Are you looking for a discounted short sale or bank owned property? Ross Milroy of Miami Angel Properties, LLC may be reached at 305-673-5300 or info@miamiangelproperties.com.
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