We are seeing a lot of numbers falling in Miami plus there are new studies and articles out there talking about people seeing a market crash coming very soon.
Let’s get into it.
So even though 2022 total home sales in Miami Dade it’s on pace to be the second-best year ever, we are seeing a more obvious shifting market. For example, total home sales in Miami decreased 40.7% year over year. This is our biggest drop in total home sales in Miami this year and probably in recent years. I will definitely dig more into this decrease since I was looking super quickly at the last 1-2 years’ data comparing and it looks like it is the biggest drop in recent years. So stay tuned for that.
This huge drop could be surprising since mortgage rates have been continuing their downward but of course, at the same time we need to think that mortgage rates have been higher this year than last year which is a real fact.
The average projection for next year between quarters is in the 6% and my best recommendation here is to not look just only at a specific number but to the stability that is showing which of course brings certainty back in and of course buyers back. Chief Financial Analyst from Bankrate says “…mortgage rates could pull back meaningfully next year IF inflation pressures ease.”
When we talk about single family homes and condo sales we know it decreased. But if we split this in November, SFH decreased 38.5% and 42.1% for condos. Huge decrease in total and this is also reflected nationally. Total home sales forecast (Herbert use graph here at 9:34 ) is 5.8M this year. As you can see we have not seen these numbers since 2015 or so. And the projection for next year (Herbert use graph here at 10:30) is that experts are saying about 5.1M home sales. However, this prediction will be adjusted after we go into the year. My guess is that it will probably be higher than that.
Moving on to the inventory which is very interesting too, we are still in a sellers’ market. Inventory of single-family homes increased 52.9% year-over-year in November putting single-family homes at 4 months of supply of inventory that is a 90% increase or 1.9 more of months supply. However, Condo inventory decreased 4% year-over-year but also had 4 months of supply of inventory. We can keep saying that there is a lack of inventory for now but the reality is this will change soon.
As far as the median price decreased 4.3% month over month to $550,000 for single family homes and increased 1.8% from the previous month to $395,000 for condo and townhomes.
Let’s talk for a moment about prices right here.
William Doerner, Economist in FHFA’s Division of Research and Statistics said:
“The rate of U.S. house price growth has substantially decelerated. This deceleration is widespread with about one-third of all states and metropolitan statistical areas registering annual growth below 10 percent.”
And the Chief Economist of First American, Mark Fleming recently said; “House price appreciation has slowed in all 50 markets we track, (which I agree with this part, we are indeed seeing the slow down), but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.” We have not seen this just yet.
Here is some data from the latest release data on home price movement. Miami is showing a -1% change and this is very proportional to inflation right? As Craig Lazzara says “ As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be more expensive, and housing becomes less affordable…”.
However, if we talk about X amount of percentage drop, in this graph above we can have an idea of numbers nationally. But in Miami, a 5% depreciation will put us back to January 2022, a 10% will put us back to October 2021, 15% to January 2021 so it’s a little similar to this graph. However, I have not heard any real expert on the field calling for those percentages but this could give you some perspective on our home price appreciation.
In fact, the latest home price forecast for 2023 is this one above which pretty much experts predict an almost flat home price appreciation. I will keep you updated as they keep updating this but so far this is their latest forecast.
Last graph about home price appreciation that could give you more perspective, especially for those who have had purchases during these times. Above is the home appreciation pre and post pandemic times table with very interesting data. Miami between 2017 to 2020 had 10% home appreciation and between 2020 to 2022 61% appreciation. Is good to know and to have this information fresh.
In the last data from November, houses are taking 31 days to go under contract, which is a 55% increase from last year and an increase from the last few months too. Meaning, they are taking longer. Condos and townhomes are taking 35 days, also taking longer to sell. It has been on that trend for the last few months.
Yet, the Miami market is different from many U.S. markets, there are people thinking that it is going to crash. So let’s talk about a new survey from the Lending Tree Consumer that says that 41% of Americans believe the housing market will crash in the next 12 months, 72% of people think it will be as bad or worse as the 2008 housing market collapse and 58% of people expect the market crashing and postponing their housing-related plans. So far I have to say that the Miami, Fort Lauderdale and Palm beach metro areas as of October 2022 are one of the strongest job markets in the country with only a 2.3% unemployment rate when compared to the 3.7% nationally. I am bringing this up because this is one of many factors to consider with these fears.
When we talk about foreclosures and short sale,
“Only 1.7% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 0.8% in November 2021. In 2009, distressed sales comprised 70% of Miami sales.” Nowhere near what we were.
Two forward-looking national data points have turned positive in recent weeks, a strong sign as we head into 2023. National mortgage purchase applications have hit seven straight weeks of positive trend data and the HMI Builders confidence index went positive on Dec. 19.
Other factor to consider is the homeownership equity which a recent analysis by Attom Data found 48.5% of mortgaged residential properties nationally were considered equity-rich in the third quarter and in their analysis of 30 equity rich housing markets is South Florida – Miami, Fort Lauderdale and West Palm Beach areas with 63.6% in equity with only 0.9% in serious problems.
As always, if you would like to download the full report provided by the Miami Realtors I’ve posted a link down in the description below 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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