Luxury Home Sales in Miami Spike in Early 2018

According the Miami Association of Realtors, Miami luxury home sales surged 12.3 percent in 1Q 2018 as median prices rose for the 25th consecutive quarter.

Total Miami luxury home sales ($1 million and up) rose 12.3 percent to 421 in 1Q 2018, up from 375 in 1Q 2017. Median prices for single-family homes increased to $337,000, a 5.9 percent increase from last year. Miami existing condo median prices rose 4.5 percent year over year to $230,000.

"Miami real estate continues to see major pent-up demand for luxury properties," said George C. Jalil, the 2018 MIAMI Chairman of the Board. "Miami and Florida as a whole is attracting Americans leaving high-tax states such as New York as the new tax law cuts into their income-tax deductions."

Miami Single-Family Luxury Homes Sales Rise 16.2 Percent

Miami single-family luxury home sales jumped 16.2 percent in 1Q 2018, rising from 185 transactions to 215. Miami existing condo luxury home sales increased 8.4 percent year over year from 190 to 206.

Federal tax reform, which was signed into law Dec. 22, sets a deductions cap for income, sales and property taxes at $10,000. The new cap is leading more residents of states with high property values and state income tax to purchase properties in states such as Florida, which has no state income tax and a pro-business tax structure.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent for 1Q 2017, up from the 4.17 percent average recorded during the same quarter a year earlier.

Total Sales Decline in 1Q 2018

Total existing Miami-Dade County residential sales declined 6.5 percent year-over-year in 1Q 2018, from 6,169 to 5,770.

Total sales volume accounted for $2.6 billion in 1Q 2018, a decline from the $2.7 billion sales volume a year ago. The sales do not include Miami's multi-billion dollar new construction condo market.

Total Miami distressed sales declined 39.7 percent year-over-year, from 755 transactions in 1Q 2017 to 455 in 1Q 2018. Only 7.9 percent of all closed residential sales in Miami were distressed in 1Q 2018, including REO (bank-owned properties) and short sales, compared to 12.2 percent in 1Q 2017. In 2009, distressed sales comprised nearly 70 percent of Miami sales.

Short sales and REOs accounted for 1.6 and 6.3 percent, respectively, of total Miami sales in 1Q 2018. Short sale transactions decreased 47.1 percent year-over-year while REOs fell 37.6 percent.

Miami Median Prices Rise for 25th Consecutive Quarter

The median price for single-family homes in Miami-Dade County increased to $337,000 in the first quarter, a 5.9 percent jump from $318,375 in the same period last year. The median price for existing condominiums increased 4.5 percent year-over-year from $220,000 to $230,000.

Statewide, the median sales price for single-family existing homes in 1Q 2018 was $248,000, up 9.7 percent from the same time a year ago, according to Florida Realtors. The statewide median price for condo-townhouse properties during the quarter was $180,000, up 7.8 percent over the year-ago figure.

The national median existing single-family home price in the first quarter was $245,500, which is up 5.7 percent from the first quarter of 2017 ($232,200), according to the National Association of Realtors (NAR).

Hot Markets Overview Reveals Strong Demand and Limited Supply in Many Local Areas

Months' supply of inventory is a strong indicator of real estate activity. Top Miami neighborhoods with the lowest months of supply of inventory in 1Q 2018:

Single-Family Homes

Westview, a north Dade community east of Hialeah, had 6 months supply
Miami Gardens, a north Dade community along the Broward line, had 3 months supply
Virginia Gardens, located north of Miami International Airport, had 2.4 months supply
Hialeah Gardens, a North Dade community west of Hialeah, had 2.4 months supply
Palmetto Estates, a South Dade community west of Palmetto Bay, had 2.6 months supply

Condominiums

Tamiami, a central west Dade community west of Westchester, had 7 months supply
Three Lakes, a South Dade community west of Kendall, had 7 months supply
Sunset, a central Dade community north of Kendall, had 2.5 months supply
The Crossings, a South Dade community west of Kendall, had 2.3 months supply
University Park, a central west Dade community west of Westchester, had 3.3 months supply

National, State Home Sales in 1Q 2018

Nationwide existing-home sales, including single family and condos, decreased 1.5 percent to a seasonally adjusted annual rate of 5.51 million in the first quarter from 5.59 million in the fourth quarter of 2017, and are 1.7 percent lower than the 5.60 million pace during the first quarter of 2017, according to NAR.

Statewide, closed sales of existing single-family homes totaled 60,204 in 1Q 2018, down slightly, 0.9 percent, from the 1Q 2017 figure, according to Florida Realtors. Florida's townhome-condo market totaled 27,088 during 1Q 2018, up 2.8 percent compared to 1Q 2017.

Balanced Market for Single-Family Homes, Buyer's Market for Condos

At the current sales pace, the number of active listings represents 6.2 months of inventory for single-family homes and 14.9 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.

Miami real estate had 22,560 active listings in the first quarter; a 3.6percent increase from the 21,771 listings at the same time last year. The inventory for single-family homes increased 2.5 percent, from 6,355 to 6,517. Miami existing condo inventory grew 4.1 percent, from 15,416 to 16,043.

Miami Homes Selling Close to List Price

The median percent of original list price received was 95.2 percent for single-family homes and 93.6 percent for condos in 1Q 2018.

The median time to contract for single-family home listings was 48 days, a 17.2 percent decrease from 58 days in 1Q 2017. The median time to contract for existing condos was 80 days, a 3.6 percent decrease from 83 days in 1Q 2017.

The median time to sale for single-family homes decreased 11.8 percent, from 110 days to 97. The median time to sale for existing condos decreased 3.9 percent, from 127 days to 122.

Miami Cash Sales Double National Figure

Cash sales represented 40.8 percent of Miami closed sales in the first quarter of 2018, compared to 44.8 percent in 1Q 2017. About 20 percent of U.S. home properties are made in cash, according to the latest NAR statistics. The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash.

Cash sales accounted for 54.2 percent of all Miami existing condo sales and 26.7 percent of single-family transactions.