The inventory for the Miami-Dade County real estate market increased 36.2% in June 2014 compared to June 2013, and sales went down 6.1% for the same time period. So far in July the total amount of inventory is almost identical to June. Sales so far for the month are also slightly less than last month. Currently, there are roughly seven months of inventory. July’s properties for sale are - single family homes at 5,651 and condos/townhomes at 10,615.
Out of all the homes on the market for sale, 84% are regular sales, while distressed properties (REO’s and short sales) account for 16%. In the single family home segment, distressed properties make up 21% of the inventory, as opposed to making up only about 13% of the condos/townhomes segment. The percentages of distressed properties and regular sales have remained consistent throughout the last few months. REO’s make up 9% of total inventory, while short sales account for just under 7% of the total inventory.
So far this month, a breakdown of what type of sales that have taken place and their percentages are very similar to what sold in June. June’s closed sales breakdown are as follows – Single Family Homes – REO’s 24.7%, Short Sales 12.0%, and Regular Sales 63.4%; Condos/Townhomes – REO’s 23.5%, Short Sales 6.9%, and Regular Sales 69.6%.
Owner occupiers make up the biggest segment of buyers in the market. Foreigners, as well as investors, still continue to purchase many condos in newer developments in Downtown, Midtown, Miami River area, and various other areas of Miami Beach. Investors aren’t purchasing as many properties as in the past because the return on investment is worse than before because of slightly higher prices.
Multiple offer scenarios take place on homes that are priced below market value. In these cases, most of the offers are financed with very few being cash. It is extremely rare for there to be more than one cash offer in multiple offer scenarios. Many times, all the offers received are finance offers, with lower downpayments than in the past.
Cash sales for the last few months have varied slightly and are now at around 58%, compared to 56% last month. In the Single Family Home segment, only 44% were cash. In the Condos/Townhomes segment, 69% were cash sales. Each month Condos/Townhomes make up approximately 55% of all sales. Since a much higher percentage of sales in this segment are purchased from Foreigners and Investors, there are much more cash sales in this segment.
The real estate market has stabilized quite a bit in the last few months compared to the last quarter of 2013 and the first quarter of this year. In that time period, each month there was an increase in inventory and usually a decrease in sales. Now month after month, every month is very similar to the past month in all the categories mentioned throughout this report. If this trend continues, the real estate market will be a balanced market with a three to five percent appreciation in most markets, it will take longer to sell homes, there will be more offers with smaller down payments, and cash sales will decrease.
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