Miami Metro Area January Home Sales

March 3, 2010

The Miami area's January home sales cooled as they normally do from December but were still the highest for that month since 2007 amid relatively strong demand for sub-$200,000 homes. As was common in other boom-bust markets, the median sale price fell as a higher portion of overall activity shifted toward resale condos and other lower-cost homes favored by investors and first-time buyers, a real estate information service reported.

In January, 6,894 new and resale houses and condos closed escrow in the metro area encompassing Miami-Dade, Palm Beach and Broward counties. That was down 16.5 percent from December but up 35.7 percent from 5,079 in January 2009, 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 January since 2007, but they fell 29.1 percent short of the average for that month since 1997, when DataQuick's complete Miami-area stats begin.

January's 16.5 percent drop in total sales from December was normal for the season, given the average decline from December to January since 1997 is 20.0 percent.

January marked the 11th consecutive month in which the region's overall sales rose on a year-over-year basis. Existing (not new) single-family detached house and condo sales have risen year-over-year for 14 consecutive months, while new-home sales in January fell below the year-ago level for the 43rd time in the last 44 months.

The January new-home tally fell 34.2 percent from December and 20.6 percent from a year earlier to the lowest level for a January since at least 1997. New-home sales, which have suffered as builders struggle to compete with low-cost foreclosures, made up 6.8 percent of total January sales. That compares with 8.6 percent in December and a new-home monthly average of 20.2 percent of total sales over the past decade. Because new homes tend to sell for more than the typical resale home, a dip in new-home sales puts downward pressure on the median sale price.

The 3,288 resale condos sold in January marked an 8.9 percent decline from December but a 63.5 percent gain from January 2009, to the highest level for a January since 2006, when condo resales totaled 3,419. Condo resales made up 47.7 percent of total Miami-area home sales in January, compared with 43.7 percent in December and 39.6 a year earlier. The monthly average market share for resale condos over the past decade is 31.6 percent of total sales.

Boosted by robust condo sales, January sales below $200,000 made up 66.0 percent of total sales, compared with 60.9 percent in December and 56.7 percent a year earlier.

Sales fell at the opposite end of the price spectrum: The number of homes sold for $1 million or more sank to 131 in January, down 46.1 percent from 243 in December but up 14.9 percent from 114 in January 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. The peak month for $1 million-plus home sales was in June 2005, when 583 sold in the Miami area.

The median price paid for all new and resale houses and condos sold in January was $140,000, down 9.7 percent from $155,000 in December and down 20.0 percent from $175,000 in January 2009. The last time the median dropped more from one month to the next was in January 2009, when it fell 12.5 percent from December 2008. Declines in the median price between December and January are not unusual.

This January's 20.0 percent drop from a year earlier marked the smallest year-over-year decline for the overall median sale price since the median fell 14.0 percent, to $245,000, in August 2008.

January's median was 51.7 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 28 consecutive months.

The median price paid for resale condos in January fell to $90,000 - the lowest since it was $87,500 in January 2002. Last month's median was down 14.3 percent from $105,000 in December, down 18.2 percent from $110,000 a year ago and down 58.9 percent from the peak $219,000 resale condo median in July 2006.

The median paid for resale single-family detached houses fell in January to $175,000, down 6.9 percent from $188,000 in December, down 12.5 percent from a year ago and down 48.5 percent from a June 2007 peak of $340,000.

Another price gauge analysts watch, the median paid per square foot for resale single-family detached houses, fell to $104 in January. That was down from $109 in December and November, and the lowest since that figure was also $104 in July 2002. The January 2010 median paid per square foot stood 50.7 percent below the region's $211 peak in summer 2006. The measure has fallen year-over-year for 40 straight months.

A popular form of financing used by first-time home buyers - government-insured FHA loans - accounted for 46.6 percent of all home purchase loans in January, up from 42.5 percent in December and 39.0 percent a year ago. Two years ago it was 6.5 percent.

Absentee buyers purchased 33.0 percent of all homes sold in the Miami area in January, up from 29.3 percent in December and 26.7 percent a year ago, according to public property records. In January absentee buyers paid a median of $90,000, down 22.4 percent from the prior month and down 32.1 percent from a year earlier. Absentee buyers are often investors, but could include second-home buyers and others who indicated at the time of sale that their property tax bill would be sent to a different address.

About 2.9 percent of the homes sold in January 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 was up slightly from a flipping rate of 2.8 percent of all sales in December and up from 1.4 percent a year earlier, based on public records. Flipping rates were higher before the housing market correction: In January 2005, for example, the Miami-area flipping rate was 4.7 percent.

Buyers who appear to have used cash to purchase their homes accounted for 58.5 percent of all January sales, and those buyers paid a median $95,000 for their homes. 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.

Miami-Fort Lauderdale-Miami Beach MSA

Number of sales	Jan-09	Jan-10	%Chng
Resale houses	2,477	3,137	26.60%
Resale condos	2,011	3,288	63.50%
New homes	591	469	-20.60%
All homes	5,079	6,894	35.70%

Median price	Jan-09	Jan-10	%Chng
Resale houses	$200,000	$175,000	-12.50%
Resale condos	$110,000	$90,000	-18.20%
New homes	$315,000	$274,495	-12.90%
All homes	$175,000	$140,000	-20.00%