MIAMI HOUSING MARKET UPDATE: MAY 2022
Is The Seller’s Market Over in Miami?
For the last few years, we have seen an extremely crazy market, where the Buyers were giving everything they had to be the winners. Indeed, a crazy market. Unfortunately, for the Sellers waiting to sell, the seller’s market is starting to shift. We are at the end of this crazy season.
Miami Housing Market Update: May 2022
According to a recent article it says that in South Florida, the tri-county the single-family home sales, went down 20.8% from last year, and in Miami Dade County only, plunged 21.3%. The article also mentioned that the trend was similar statewide as the number of single-family home sales fell 15.3%.
What Is The Reason For This Decrease?
For the last few years we have been seeing a strong seller’s market. While the inventory was insufficient and tight for the huge demand led by the lowest interest rates in history, the market was not holding the buyer’s demand causing a strong seller’s market.
We also know that with a big buyer’s demand and low inventory affecting the market, the prices were going to increase and cause all the craziness. However, now we are seeing interest rates going up and this is impacting directly the buyer’s demand we have been having. That means fewer buyers could afford homes because the mortgage payments would be too high.
And, we need to keep in mind that the data below, is from April yes, but they are properties that went under contract a month or two earlier before mortgage rates really started to take off. In other words, the impact on prices could be yet to come.
Single Family Homes in Miami
Median Sale Price
The median sale price for a single-family home is showing an increase of 9.7% from last year now being at $565,000 and an increase of 4.6% from March with $540,000. Even though we are seeing an increase in median prices, remember, these properties went under contract 1 or 2 months ago when the increase in interest rates was starting.
I am very interested to see May and June data, but so far this is how the median price graph looks like In Miami Dade for single-family homes only.
Additionally to that, according to different local mortgage lenders across South Florida, they are seeing a substantial decrease in the number of applications.
Luxury Market
The luxury market also took a hit. Miami single-family luxury homes plummeted by 31.2%. As far as the luxury condo sales stay almost even with a 0.3% decrease.
The Median Time to Contract
The median time to contract decreased by 30% to 14 days and months’ supply of inventory for single-family homes increased month over month for the first time in so long to 1.9 from 1.7 months a huge indicator of the shifting market.
Condos & Townhomes in Miami
Closed Sales
Miami’s existing condo sales decreased 7.4% from last year to 2,199.
Median Sale Price
The median sales price for condos increased 20% from last year to $390,000 in April and decreased 2.5% from March with $400,000.
The Median Time to Contract
The median time to contract in April was 25 days and 52.8% decreased from April 2021.
Months’ Supply of Inventory
Months’ supply of inventory for condos remained the same at 2.3 months and that is a decrease of 67.6% from last year. Very interesting to keep watching this data too.
Condo Market
In the condo market, we are not seeing a huge change just yet, but we will eventually. Additionally, there are so many new condo projects in Miami that a lot of investors and second-home buyers are looking and in which is holding the numbers a little.
In fact, if you would like to invest in Miami with zero rental restrictions meaning you can rent daily as an Airbnb. Click HERE to watch this video about it.
Additional Facts
- We saw that to battle national inflation, the Federal Reserve has raised rates two times this year. These 2 are not going to be the only ones since they have plans for more increases.
- So far, mortgage rates have increased more than 2 percentage points since the beginning of 2022. According to NAR, at the beginning of this year when rates averaged 3.2%, the monthly mortgage payment increased by about $520.
- In April, according to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.98% up from 4.17% in March. Experts predict that the mortgage rate is projected to land at 5.3% by the 4th Quarter of 2022 but we know that it did hit that already (so far).
- Historically in the U.S., total inventory tends to expand six months after mortgage rates begin to rise. According to a new study by Realtor.com detailed that 64% of possible sellers intend to list their home by October 2022.
With all of those facts, yes, we are starting to see a change in our market and nationwide. I am definitely interested to see the next few months and see how everything goes.
But if you ask me if: Are we heading to a crash? My answer is no.
This is not 2008-2010. In 2009 the total distressed sales comprised 70% of Miami sales, and right now only 1.3% of the distressed residential sales closed and happened in Miami, a decrease from the previous month with 1.5%. And a 25% decrease from last year. So no, this is not the 2009 period.
Future Buyers & Sellers…
Buyers, keep in mind that we are going to start seeing less and less competition with unfortunately higher interest rates. So, the market is going in your direction. However, it will take a long time to get there. If you can, do not wait for higher interest rates to happen because they will continue to increase.
Home sellers thinking of putting their property on the market must set the right expectations. If you keep waiting, your house will take longer, will get less offers, and eventually you will have to start giving concessions and negotiating with the Buyers.
–> Do you think that the sellers’ market is over? How can I help?
As always, if you would like to download the full report provided by the Miami Realtors I’ve posted the links down for you to get it.
To see the full report for Single Family Homes click here
To see the full report for Townhouses and Condos click here
If you are thinking about buying or selling in Miami, CLICK HERE or you can call me at 786-376-2398.
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Sharon Colón
Your Favorite Real Estate Agent in Miami
Home Miami Realtors
786-376-2398
[email protected]
www.sharoncolonre.com
