Miami Metro Area November Home Sales

January 12, 2010

Miami region November home sales shot up 61 percent from extremely low levels a year earlier as a tax credit, lower prices and ultra-low mortgage rates stoked demand from investors, first-time buyers and others. The median sale price rose modestly from October despite robust sales of lower-cost homes - especially condos - but it still fell 26.2 percent short of the year-ago mark, a real estate information service reported.

In November, 6,937 new and resale houses and condos closed escrow in the metro area encompassing Miami-Dade, Palm Beach and Broward counties. That was down 14.7 percent from October but up 61.0 percent from 4,309 in November 2008, according to MDA DataQuick of San Diego, Calif. The firm tracks real estate trends nationally via public property records.

Total escrow closings were the highest for a November since 2006, but they were still the third-lowest for that month since 1997, when DataQuick's complete Miami-area home sales stats begin.

November marked the ninth consecutive month in which the region's overall sales rose on a year-over-year basis. Existing (not new) single-family house and condo sales have risen year-over-year for 12 consecutive months, while new-home sales in November were up from a year earlier for the first time in 42 months. However, this November still had the second-lowest new-home sales tally for that month since at least 1997.

Last month's 14.7 percent drop in total sales from October was normal for the season. On average since 1997, sales have declined 14.0 percent between October and November.

Sales of existing condos soared 83.3 percent above a year earlier, to the highest level for a November since 2005, when November condo resales totaled 4,090. Sales of existing condos made up 44.1 percent of total November sales, compared with 43.0 percent in October, 38.7 percent a year ago, and a monthly average of 31.2 percent over the past decade.

The overall year-over-year sales jump in November reflects several factors: First, sales a year ago were unusually low. Also, the combination of lower home prices and super-low mortgage rates boosted affordability this fall and helped spur sales at a time many people were already motivated to buy before a federal homebuyer tax credit might have expired at the end of November. As it turned out, that tax credit was extended and expanded.

November sales of homes priced $50,000 to $150,000 outperformed the overall market, rising 2 percent from October and 131.4 percent from November 2008. The $50,000 - $150,000 sales represented 38.8 percent of total home sales in November - the highest level of any month this year and up from 26.8 percent in November 2008.

At the other end of the price spectrum, the number of homes sold for $1 million or more fell to 161 in November. That was down 19.9 percent from 200 in October but up 27.8 percent from 126 in November 2008. The figures are based on an analysis of public property records, where there was a purchase price or purchase loan amount of $1 million or more. For the first 11 months of 2009, sales of $1 million-plus homes fell 36.3 percent from the same period last year. The peak month for $1 million-plus home sales was in June 2005, when 583 sold.

The median price paid for all new and resale houses and condos sold in November was $155,000, up 3.3 percent from October but down 26.2 percent from $210,000 in November 2008. It was the smallest year-over-year decline for the overall median sale price since the median also fell 26.2 percent, to $200,000, in December 2008.

Last month's median was 46.6 percent below the peak $290,000 median in June 2007. The Miami area's median price has fallen on a year-over-year basis for 26 consecutive months.

Another price gauge analysts watch, the median paid per square foot for resale single-family detached houses, rose slightly to $109 in November, up from $108 in October but down 16.8 percent from $131 in November 2008. Last month's figure stood 48.3 percent below the region's $211 peak in summer 2006. The measure has fallen year-over-year for 38 straight months.

A popular form of financing used by first-time home buyers - government-insured FHA loans - accounted for 48.5 percent of all home purchase loans in November, up from 47.1 percent in October, 32.5 percent a year ago and 4.0 percent two years ago.

Absentee buyers bought 28.8 percent of all homes sold in the Miami area last month, according to public property records. Absentee buyers are often investors, but could include second-home buyers and any others who indicated at the time of sale that their property tax bill would be sent to a different address.

About 3.1 percent of the homes sold in November had been "flipped" within a three-week to six-month period, meaning they had been bought on the open market and then re-sold within that window. That's up from a flipping rate of 2.9 percent of all sales in October and 1.7 percent in November 2008, based on public records. Flipping rates were higher before the housing market correction: In November 2005 the Miami-area flipping rate was 4.9 percent, while it was 4.5 percent in November 2004.

Buyers who appear to have used cash to purchase their homes accounted for 52.6 percent of all November sales. Specifically, these were transactions where there was no indication of a purchase loan recorded in the public record at the time of sale. Some of these "cash" buyers could have used alternative financing arrangements outside of a typical purchase mortgage, and in some cases these buyers might be taking out mortgages after their purchases. All-cash deals are popular in markets where prices have dropped sharply and sellers favor the relative speed and certainty of cash transactions.

The use of adjustable-rate mortgages ("ARMs") to buy homes rose in November to 5.7 percent of all purchase loans, up from 5.4 percent in October and up from a decade low of 4.4 percent in May this year. However, November's purchase ARM level was down from 6.8 percent a year earlier. Miami's monthly average for ARM use over the past decade is 45.3 percent of purchase loans.

Miami-Fort Lauderdale-Miami Beach MSA

Number of sales	Nov-08	Nov-09	%Chng
Resale houses	2,109	3,332	58.00%
Resale condos	1,669	3,059	83.30%
New homes	531	546	2.80%
All homes	4,309	6,937	61.00%

Median price	Nov-08	Nov-09	%Chng
Resale houses	$235,000	$184,800	-21.40%
Resale condos	$140,000	$105,000	-25.00%
New homes	$315,000	$257,250	-18.30%
All homes	$210,000	$155,000	-26.20%

Media calls: Andrew LePage (916)456-7157