Miami real estate sales soar, price slump drags on

Miami real estate sales soar, price slump drags on

Miami real estate sales soar, price slump drags on
BY MARY UMBERGERBy some measures, one persistent dark cloud may be finally lifting over a region that is otherwise known for sunshine. Homes are selling again in Miami.

Sales in March were noticeably brisk: Existing-home sales in Miami-Dade County spiked up 59 percent and condo sales soared by 85 percent that month compared to the same month last year, according to the Miami Association of Realtors.

Prices, however, are another story. The same March data showed Miami-Dade prices continuing their years-long plunge, with single-family homes falling 19 percent, year over year, to a median of $159,800. Condos got cheaper, too: They dropped by 30 percent, to $97,400.

Overall, home values have fallen more than 55 percent since the frothy days of June 2006. They are now back at 2002 levels, according to the Miami Herald.

The pricing pressure, of course, comes from the steady flow of foreclosures and short sales, according to an Inman News canvass of agents.

And sellers continue to slash, according to an April report from the real estate research firm Trulia. Miami ranked second, to Detroit, in the size of the average home discount over the last 12 months; Trulia reported that Miami sellers have cut their prices by an average 11 percent in that period.

But foreclosure-related pricing may be in line for a change, as several agents said the bank-owned property (REO) pipeline has begun to tighten in response to the foreclosure moratorium in place with numerous lenders after the so-called "robo-signing" debacle.

"Many analysts predicted that a slew of foreclosures would hit the market in 2011," said Lucas Lechuga, a Keller Williams Realty agent. "It's almost the middle of the year and I'm just not seeing anything close to what many had feared."

Still, the "happy dance" is far from universal. A market analysis by the Raymond James & Associates financial services firm said the company fears that statewide reports of increased sales amount to an "unkind economic head fake."

"We are increasingly cautious that any recent anecdotes from foreclosure-ridden areas could be false positives, given that lenders will likely soon reaccelerate the foreclosure liquidations from Florida's immense backlog," a Raymond James analyst noted.

Nonetheless, the real estate community claims to be rallying with the news of higher sales volumes: In a market that has been Exhibit A in the real estate crash, any description with the word "up" in it -- even if it amounted only to a little more than 1,000 Miami sales in the Miami metro area for all of March -- is more than welcome.

Indeed, some reports from the field sound a little like the heady olden days before the crash.

"Heightened demand is evident for REOs, new construction, and properties with close proximity to the ocean and/or downtown," according to Ralph De Martino, residential president of the Miami Association of Realtors and broker-president of Ocean International Realty.

"In Miami-Dade there are currently 20- and 30- day supplies of REO condominiums and single-family homes, respectively," he said.

The buyer pack is being led by investors and internationals, particularly from South America, agents told Inman News. They like to pay cash and they like properties in good condition, the agents said.

"Foreign nationals now represent 60 percent of our sales," said Melissa Rubin, vice president and broker, Platinum Properties International. "The biggest increase has been from Brazilians and Venezuelans. The Canadians, who have traditionally led in foreign purchases, are now the third-strongest group."

Other readings on the Miami-area market:

• Median prices for luxury properties, defined as starting at $535,000, declined by 6.8 percent in the first quarter, to $885,000, according to a report by Douglas Elliman Florida. However, such homes moved faster, on average, than the rest of the market, the report said: 54 days vs. 66 for the overall market.
• South Florida homebuilders saw a slight bounce in February. Though Miami-Dade builders took out a paltry 57 single-family permits that month, the data was still 10 percent better than the year before. Nonetheless, February's permit numbers were 93 percent below those seen in February 2005, according to the U.S. Census.
• Like closed sales, pending sales also were positive in March, according to the Realtors group. Pending sales were up 18 percent, year over year, in Miami-Dade, and up 6 percent in nearby Broward County.

Miami market data

Miami metro area
Population (2009)	2.5 million
Population growth (2000-09)	+11%
Total closed sales (2010)	17,086
% change closed sales (March '09-March '10)	+73.4%
Sales rate per person (per total population, 2010)	1 sale per 146 people
Median sales price, single-family home (March '11)	$159,800
Median sales price, condo (March '11)	$97,400
% change median sales price (March '10-March '11)	-19% (condo: -30%)
% change foreclosure filings rate (March '10-March '11)	+38%
% of sales distressed (March 2011)	+60%
% homes affordable to median-income households (Q4 2010)	65%
% unemployment (February 2011, not seasonally adjusted)	11.8%
Walk Score (city of Miami)	72
Rent-vs.-buy ratio (Q1 2011)	6

Sources: U.S. Census; RealtyTrac, Miami-Dade Department of Planning and Zoning, WalkScore, Trulia, Raymond James & Associates, Miami Association of Realtors, National Association of Home Builders/Wells Fargo, Florida Realtors.