Residential sales in the Miami area decreased 13.1% year-over-year in August 2023 due to elevated mortgage rates and tight supply in certain price ranges. Find out how this affects the Miami real estate market.

The Miami area real estate market experienced a significant 13.1% decline in residential sales in August 2023 compared to the same period last year. This change in transactions was largely due to two key factors: rising mortgage rates and a shortage of supply in certain price segments.

Sales of single-family homes in Miami decreased by 8.1% year-over-year, dropping from 1,032 in August 2022 to 948 in August 2023. Meanwhile, sales of existing condominiums in Miami fell by 16.5% during the same period, from 1,473 in August 2022 to 1,230 in August 2023.

Mortgage rates played a significant role in this decline. According to Freddie Mac, the 30-year fixed mortgage rate averaged 7.18% as of September 14. This represented an increase compared to 7.12% the previous week and 6.02% a year ago.

The inventory of available homes at the end of August decreased by 6.4% year-over-year, from 10,113 to 9,467 properties. The inventory of single-family homes significantly decreased by 19.7% in August 2023 compared to the previous year, reducing from 3,813 active properties last year to 3,062 last month. In contrast, the inventory of condominiums increased by 1.7% year-over-year, from 6,300 to 6,405 listings during the same period in 2022.

Newly listed single-family homes for sale in Miami decreased by 7.8% from 1,573 to 1,450 year-over-year. Newly listed condominiums also decreased by 5.5%, from 2,118 to 2,002 year-over-year.

The supply of homes in the single-family home market in Miami stands at 3.5 months, indicating a seller's market. Meanwhile, the supply of existing condominiums is at 5.4 months, also indicating a seller's market. A balanced market between buyers and sellers generally offers between six and nine months of supply.

The median prices of single-family homes in Miami-Dade County increased by 12.5% year-over-year in August 2023, rising from $551,250 to $620,000. This increase marks the continuous rise in median prices of single-family homes in Miami for 141 consecutive months, a historic record. The median prices of existing condominiums increased by 10.9% year-over-year, from $375,000 to $416,000. The median prices of condominiums have remained stable or increased in 141 of the last 147 months.

Miami ranks fourth in the United States in annual home price appreciation, according to the latest CoreLogic US S&P Case-Shiller Index.

Historically, a market with less than 6 months of supply tends to have rising prices. Single-family homes and existing condominiums in Miami have 3.5 and 5.4 months of supply, respectively.

Only 1.2% of all closed residential sales in Miami were distressed sales last month, including bank-owned properties (REO) and short sales, which is lower than the 1.9% in August 2022. In 2009, distressed sales accounted for 70% of sales in Miami.

Short sales and REO properties represented 0.3% and 0.9%, respectively, of total sales in Miami in August 2023.

The median percentage of the original price received for single-family homes in Miami was 97.4% in August 2023. The median percentage of the original price received for existing condominiums was 96.5%.

The median time between listing date and contract date for single-family home sales in Miami was 23 days, compared to 21 days the previous year. The median time to sell single-family homes was 64 days, compared to 61 days the previous year.

The median time between listing date and contract date for condominiums was 34 days, compared to 23 days the previous year. The median time to sell condominiums was 76 days, compared to 65 days the previous year.

Cash sales accounted for 40.3% of closed sales in Miami in August 2023, compared to 39.7% in August 2022. According to the latest statistics from the National Association of Realtors (NAR), approximately 27% of home sales in the United States are made in cash.

Cash sales accounted for 49.8% of all existing condominium sales in Miami and 27.9% of single-family home transactions.

The Miami real estate market remains dynamic despite these challenges, and buyers and sellers need to stay alert to the changing trends in the market. With constantly changing mortgage rates and limited supply, it is essential to have an expert real estate agent to successfully navigate this competitive market.