Miami Real Estate Market Holds Strong in the Third Quarter
3rd quarter is the charm with strong and stable numbers
The 2008 recession created a panic in the world of real estate. Homes went into foreclosure and many homeowners stalled at the idea of selling. Now, given the growth in the job market and homeowners warming to the idea of selling, supply is increasing and affordability has solidified. America is seeing the increase and Miami remains strong.
Home ownership becoming more affordable
America is experiencing historically low mortgage rates. Millennials, many of whom continue to live with their parents, are joining the adult world and renting with the intention to save up enough to buy. One important aspect of affordability is the supply. Homeowners are losing their fear and seeking to sell their homes in hopes of moving up in the real estate market. The combination of low interest rates coupled with a multitude of housing options creates a strong market.
Miami rises in numbers and confidence
Miami is a hub for culture, finance, and start-ups. In the spirit of the real estate mantra, location, location, location, Miami bridges North and South America. Given the strong economies of Chile, Brazil, and Colombia, it should come as no surprise that Miami has double the national average of residential cash buyers. These cash buyers favor condos (62.5%) over single-family homes (33.5%).
What is also notable is there is a lower number of available homes because of the record number of sales, so the inventory is quickly going. According to the Miami Association of Realtors, Miami-Dade County had 7,811 total residential sales in the third quarter of 2015, a 2.3 percent increase compared to 7,632 sales in the third quarter of 2014. Single-family home transactions rose 4.1 percent, growing from 3,522 to 3,699. Despite a rise in supply of pre-construction condo units east of Interstate 95, existing condo transactions increased 0.8 percent from 4,080 to 4,112.
Miami will continue to dominate in 2016 with these increasing numbers as a foundation.
Predictions for real estate
Many in the real estate world remain hopeful that 2016 will be an even stronger year given the solid upturn in 2015’s third quarter.
“Sales activity in 2016 will once again be primarily driven by the ongoing release of more pent-up sellers finally realizing their equity gains and using it towards the down payment on their next home,” said Lawrence Yun, chief economist of the National Association of Realtors®.
In other words, as sellers lose their inhibitions regarding entering the real estate market, they begin to grow hopeful that the next home will be make the perceived risk worthwhile. There’s nothing like hope to drive demand and cull inventory.
If you’re interested in learning more about the current real estate market and/or purchasing a home, contact Suzanne Feanny.
Miami Association of Realtors. (11 November 2015). Miami Real Estate Continues Strong Momentum in 3Q. Retrieved from http://www.miamire.com/news/2015/11/12/miami-real-estate-continues-strong-momentum-in-3q
Desanctis, A. (13 November 2015). Existing-Home Sales on Track for Further Expansion in 2016. Retrieved from http://www.realtor.org/news-releases/2015/11/existing-home-sales-on-track-for-further-expansion-in-2016
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