Miami Existing Home Sales Rise, Home Prices Edge Up in 2Q

Miami, FL (Vocus) August 11, 2010

In the Miami Metropolitan Statistical Area (MSA), sales of homes – including existing single-family homes and condominiums – increased 27 percent in the second quarter of 2010 compared to the second quarter of 2009 and 53 percent compared to the second quarter of 2008. This rise marks eight consecutive quarters of increasing sales according to the MIAMI REALTORS. Sales of all residential property types have increased consistently since August 2008 in the Miami MSA.

Miami sales of existing single-family homes increased 10 percent in the second quarter of 2010 from a year earlier and 89 percent from two years ago. The sales of existing condominiums in Miami surged 45 percent, compared to the second quarter of 2009 and 99 from the second quarter in 2008. Statewide sales of single-family homes and condominiums increased 21 percent and 45 percent respectively.

“These quarterly figures reflect the fact that the South Florida real estate market continues to strengthen and stabilize,” said Jack H. Levine, 2010 Chairman of the Board of the MIAMI REALTORS. “Sales of condominiums have really taken off as buyers and investors take advantage of record affordability conditions. This will result in much needed inventory absorption, which will further enhance the local market’s performance.”

Median Sales Prices
Median sales prices of single-family homes increased slightly while condominiums decreased slightly in the second quarter of 2010, mainly due to the increased number of foreclosures and short sales. The median sales price for single-family homes reported in Miami-Dade in the second quarter of 2010 was $197,200, a one percent increase from the second quarter of 2009. The median sales price for condominiums was $128,100, an eight percent decrease from the previous year. Statewide, median sales prices dropped one percent to $141,300 for single-family homes and 10 percent to $98,900 for condominiums.

Inventory Levels
Total housing inventory in Miami-Dade County has decreased 10 percent from a year ago and increased 4.4 percent from the previous quarter. In Broward County, inventory has decreased 14 percent from a year ago and increased 3.3 percent from the previous quarter.

“Housing inventory continues to drop year-over-year, but we’re seeing the total inventory rise slightly month-to-month in the short-term,” said Oliver Ruiz, MIAMI REALTORS Residential President. “The good news is that we continue to experience rising sales and stabilizing prices. We expect the local market’s fortitude to be sustained long-term by international, vacation, and second home buyers in addition to other U.S. buyers who want to experience the enviable local lifestyle.”

Florida Home Sales Increase for the 19th Straight Month

Florida’s existing home sales rose in March, which means that sales activity has increased in the year-to-year comparison for 19 months, according to the latest housing data released by Florida Realtors.

Existing home sales increased 24 percent last month with a total of 16,294 homes sold statewide compared to 13,090 homes sold in March 2009 (see chart above). Statewide existing home sales last month increased 37 percent over statewide sales activity in February (11,890 homes sold). Also noteworthy: While March’s statewide existing-home median price of $137,000 was down from the same time a year ago, it was 4.3 percent higher than February’s statewide existing-home median price of $131,350.

MP: These recent sales data for Florida paint a much more positive picture of the Florida real estate market than the Case-Shiller home price data released yesterday, which showed annual price declines through February 2010 of -7.7% for Miami and -9.8% for Tampa. For March 2010, the statewide median price decline was only -3% versus March 2009, and the other key variable - home sales - was up by 24% since last March.

Assuming the median home price is not too different than the mean home price, the total housing sales volume increased from about $1.85 billion in March 2009 to about $2.23 billion in March 2010, for a 20.5% increase. If we measured housing market activity like we measured vehicle sales - in unit sales, without regard to price - we would conclude that the Florida housing market is booming, with 19 consecutive monthly increases compared to the same month in the previous year, and a whopping 24% increase from March of last year. And if we measured housing activity like we measure retail sales (total sales volume), we would also conclude that the Florida housing market is doing quite well, with something like a 20% increase in sales volume (assuming the median home price is an accurate estimate of the mean home price).

Isn't that a possible limitation of the Case-Shiller Home Price Index as a measure of the real estate market - it only looks at one of the key housing indicators, price, and completely ignores the other key variable, units sold; and therefore also fails to measure housing sales volume?