Miami Housing Update: November 2022

This year’s sales numbers are on pace to be the second biggest sales year ever. We are still missing November and December data but it looks like it is possible to hit that mark. However, October 2022 sales decreased 30.6% from October 2021 which we know was a crazy year.

 

Single Family Homes in Miami

Home sales decreased to 884 from 1,161 a 23.9% decrease year over year.

 

Month Supply of Inventory:

We have 1.5 months inventory higher than last year. It sits right now at 3.7 coming from a continuous increase since earlier this year. That is a lot more inventory. If you have been watching my housing updates I’ve been saying to keep watching these interesting numbers.

 

Median Time to Contract:

Is very interesting that we have seen 8 days increase in the median time to contract which you know are the days in average that a property sits on the market. Coming from a continuous increase too.

 

Additionally in the Miami Real Estate Market:

For the last couple of months we saw the continuous increases in mortgage rates which the:

“MIAMI REALTORS® Chief Economist Gay Cororaton anticipates a 50-basis point increase in the federal funds rate in the Fed’s December meeting, followed by smaller rate hikes in the first quarter of 2023 and possibly a pause in the second half of the year as the Fed assesses the effect of the rising mortgage rates on the economy.”

While some other experts are even talking about the possibility of mortgage rates hitting the 9% range. 

 

Median Price for Single Family Homes:

As far as the median price in Miami increased to $575,000 that’s an increase of 17.3% year over year and that is 3 months in a row seeing an increase in the median price in Miami after some drops.

Are we going to keep seeing these numbers going up? It looks like the answer is yes and even some experts are saying it too.

According to the National Association of Realtors (NAR) Chief Economist Lawrence Yun, “it’s unlikely that the elevated mortgage rates, slower home sales, and high inflation will cause home prices to drop next year.” This is very interesting to pay attention to especially for those holding up until next year waiting for better terms because we are still seeing extremely low inventory.

 

 

New Listings in Miami Dade:

New listings for single-family homes decreased by 13.9 from last year in Miami Dade County and it has been decreasing for a couple of months too.

Active total listings have been increasing and what is very scary is that a lot of them could be vacant homes. Either investment homes or new construction. We are seeing right now new construction homes are not selling that quick.

 

How is the Miami Market ?

We have been seeing that a lot of companies have been moving to South Florida bringing more jobs and a decline in office occupancy, but let’s take a minute to see what is happening nationwide because things do not last forever.

We saw that big companies like Facebook decided to layoff thousands of employees, Amazon , Twitter, Carvana etc. and of course all of this is happening nationwide not only in Miami but of course we eventually are going to see an impact of that in the market, however, if we look at the unemployment rate:

“the Miami-Fort Lauderdale-West Palm Beach metro area has the 6th-lowest unemployment rate (2.3%) in the nation. This is lower than the unemployment rate of 2.5% in Florida and 3.5% rate nationally.”

And this is something very important to highlight when we want to know more about the market in general, about what is trending, not only in Miami but also Nationwide.

 

Rent Prices in Miami

While there are some markets already reporting a continuous rent growth deceleration, that’s not the case in Miami just yet. But it is a good sign nationwide. In the latest Single-Family Rent Index report from CoreLogic, Miami is at the top of the list being the city with the highest year-over-year increase in single-family rents in September 2022 at 20.1% increase and if you look at that number it’s like a median rent price of $2,620 a month. They will release their next report in December so if you want me to share these updates please let me know. This is very interesting because while those numbers are still going up, that could also mean home prices increase.

And that gets me to the next point.

 

People Love Miami!

Last month, Miami was ranked as the #1 destination in the world for foreign investment by Financial Times. Miami is Miami and of course, this is another point to evaluate people moving to Miami. When people compare other home prices, Miami Dade prices are lower ($575,000) compared to major markets like San Francisco ($1.3 million), Los Angeles ($893,200), New York -Jersey City ($627,400), Boston ($608,900), Denver ($666,600) and Washington DC ($581,300) and this is just talking in USA but I just mentioned that Miami is the #1 destination in the world for investments.

 

Keep In Mind the Following:

If you are a buyer or a seller in this market, what I am about to say is very very important for you to understand.

Buyers are worried and holding up waiting for interest rates to decrease. Hey, overall, interest rates dropped their biggest drop since 1981 just a few weeks ago and experts are saying they will likely keep going up probably all over 9% so you need to sit down and really think what the cost of waiting for you is because more than likely it will certainly be higher. I’ve been hearing a lot of buyers saying that they are going to wait for the prices to go down since last year and now interest rates too. 

On the other hand, if you are a seller also on the fence, delaying waiting to sell here is what I think is one of the most important things here, something really really important to know is that builders that are trying to sell their properties, trying to not get hit by the shifting market are offering everything at this point pretty much.

A lot of incentives, from points to help in the mortgage payments meaning lower interest rates, zero closing costs or a chunk off of the closing costs, offering all types of incentives for the buyers to be able to sell those homes and actually trying to get us, realtors back to bring them the buyers since for the last 2 years we were pushed aside but they need to close their year as good as they can. And now you are in a position that you either must offer some type of incentives, money back to the buyers, etc.

I don’t even recommend you to wait after let’s say March because right now we just saw a decrease in interest rates that could help big time buyers. Plus, buyers that could have realized that right now they don’t have that much of competition and the cost for them to wait could be bad for them, they will buy sooner rather than later.

Another important point that I wanted to bring up is equity in homes.

“Homeownership equity is frequently cited as a major reason why the current housing downturn is markedly different than the conditions of the 2008 global financial crisis.”

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. This is good to understand that “A persistent housing shortage should help maintain a floor in how much home prices will drop” and even though there have been drops in prices, Miami is still one of the most equity rich cities in the US.

 

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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Sharon Colón
Your Favorite Real Estate Agent in Miami
Home Miami Realtors
786-376-2398
[email protected]
www.sharoncolonre.com