Historical records of the Miami real estate market in May 2022

Historical records of the Miami real estate market in May 2022

According to the Miami Association of Realtors and MLS (Multiple Listing Service), Miami-Dade County broke two important records in May 2022.

First, the past month was the tenth recorded month with the biggest home sales in the county. Second, this May has also become the second largest month ever recorded in terms of the same rate.

In the past six months, sales have been driven by rising mortgage interest rates. Buyers rush to buy a home as long as the interest on loans allows it or makes this purchase profitable (note: It is about buy-to-invest housing units). Over the past six months, interest rates on loans have increased from 3% to 6% on average.

Currently, high sales levels help the market return to a healthy balance of supply and demand. For the first time since July 2019, the number of private houses for sale has increased.

In the upcoming months, one should expect a decrease in “bidding wars” among buyers, an increase in the number of days between when a unit enters the market and the conclusion of a purchase contract, and a decline in price growth rates.

Returning to the “second best May ever” subject, for the past month, sales figures for the previous month surpassed those of any comparable months in any year, with the exception of May 2021. In May 2022, 3,198 residential units were sold. It is slightly below the recorded high sales of 3,536 units in May last year.

In the case of condominium sales, the transaction volume also showed a slight decline from 2,176 contracts in 2021 to 2,005 contracts in 2022 in annual terms. It dropped by 7.9%. This decrease happened mainly due to the shrinking supply in the market and rising lending rates. Private houses also showed a decline of 12.3%, from 1,360 transactions to 1,193 transactions in annual terms. The reasons are similar to the situation with condominiums.

Last May, mortgage rates were 3%, and a larger number of housing units were put on the market for sale. However, in comparison with sales in 2018, there was an increase of 21.9%, resulting in 2,622 transactions against 3,198 transactions in May of the current year.

Sales by price categories

Condominium sales within the $400,000 to $600,000 price range rose by 29.9% to 426 transactions in annual terms. Private homes in the same price range showed a 4.5% decline to 447 transactions.

MSI is 2.6 months for this condominium category, 3.9 months for the $600,000 to $999,999 range, and 6.2 months for units worth more than $1,000,000. The MSI/months supply of inventory indicates how many months it will take to sell all of the available properties without new supply coming on the market.

Foreigners are among the largest categories of condominium buyers. They also prefer luxury condominiums worth $1,000,000 and higher.

Over the year, sales of this luxury housing grew by 8.8% to 322 transactions. On the other hand, sales of premium private homes declined by 5.1% to 258 transactions. MSI for condominiums is 6.2 months and 4.8 months for private homes.

In addition to foreigners, buyers from states with high income taxes also relocate to Florida. There are no such taxes in Florida. A large inflow of buyers comes from major cities, such as New York.

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