Posted on Fri, Oct. 19, 2012
Existing home prices up, sales down in Miami-Dade and Broward in September

By Martha Brannigan
mbrannigan@MiamiHerald.com


Tight inventory helped drive up existing home prices in Miami-Dade and Broward in September, as the shortage of residential properties on the market crimped sales.
In Miami-Dade, the median price for a condominium leaped 36.2 percent to $150,000 in September from a year ago, while the median price for a single-family home rose 8.6 percent to $190,000, the Miami Association of Realtors said.

Sales fell 3.4 percent in September from a year ago as inventory plunged 24 percent.

Those same trends held true for Broward County, where the median price of an existing single-family home rose 10.2 percent in September to $205,000 from $186,000 a year earlier, the Greater Fort Lauderdale Realtors said. The median price of an existing condo or townhouse jumped 25.4 percent to $89,000 from $71,000 a year earlier, the group said.

Sales of single-family homes in Broward dipped 1.2 percent in September to 3,017 from 3,053 a year earlier; townhouse and condo closings dropped 7.4 percent to 3,487 from 3,766 in September 2011, the Realtors group said.

Across Florida, existing home sales rose 2.1 percent in September as the median price climbed 7.4 percent to $145,000 amid a 31.5 percent drop in inventory, according to the Florida Association of Realtors.

Cash-rich foreign buyers continue to drive sales in Miami-Dade, particularly in areas like Brickell Avenue and Miami Beach, where according to Ron Shuffield, president of Esslinger-Wooten-Maxwell, some 60 to 65 percent of recent sales went to foreign buyers.

“People from every corner of the globe enjoy coming here, and more and more they are now buying here,’’ said Shuffield, who on Thursday hosted brokers from Spain, Ireland, Uruguay, and Hong Kong at his Coral Gables headquarters to acquaint them with the Miami market.

Among recent buyers is Ian Runnalls, a 37-year-old portfolio manager from Toronto. He and his wife recently closed on a one-bedroom, 1.5-bath condo at downtown Miami’s Marina Blue, for $320,000 cash, capping a five-month search. The unit seller was from Italy.

“The prices were much firmer than I expected,’’ said Runnalls, who plans to keep the unit at 888 Biscayne Blvd. as a rental and perhaps use it as a vacation getaway sometime in the future.

“As an investment, it makes a lot of sense. The price per square foot is a lot cheaper than Toronto. And the rental yields are much, much stronger than Toronto,’’ Runnalls said.

Jenny Huertas, a broker with CVR Realty, said Runnalls previously lost out to a higher bidder on a unit in the same building, so when another one became available, “I told him you’ve got to put an offer at the full price if you want to get it.’’

“People are paying above list price, just to ensure they’re getting a property,’’ said Anthony Askowitz, an agent with Re/Max Advance Realty II.

Askowitz said rock-bottom interest rates of about 3.375 percent for a 30-year fixed-rate mortgage and 2.875 percent for a 15-year fixed-rate loan help make buying attractive for those who qualify.

Home prices have risen for 10 consecutive months in Miami-Dade, which has been among the hardest hit markets in country in the housing crisis. In recent months, multiple offers and bids over asking price have returned, at least for properly priced properties in desirable areas.

A 2-bedroom, 1-bath house in the Roads section of Miami drew more than a dozen offers within a week of its listing at $325,000 on Sept. 24. The vintage-1941 house went under contract Oct. 3. “We priced the house right, and it’s in a great pocket, a very desirable area,’’ said Melissa Schack Stone, an agent with Coldwell Banker. “And there was no inventory [for sale] in that area.’’

In the Kendall area, empty nesters Andrew Reeves and his wife “had five offers in the first four days’’ of putting their 4-bedroom, 3-bath house on the market. “We got the asking price plus some,’’ he said. “My wife was freaking out, [saying] ‘What if we can’t find something to buy?’’’

Eager to clinch a deal on the Kendall home, the buyer agreed to a contract provision allowing the Reeves to stay up to three months after closing if necessary. But Reeves said they won’t have to: “We found a brand, spanking new home in Homestead,’’ a 4-bedroom, 2-bathroom Lennar home for under $200,000.

In September, distressed sales, including foreclosures and short sales, totaled 47.4 percent of transactions in Miami-Dade, down from 59 percent a year earlier. Distressed sales also constituted a smaller share of deals in Broward.

The inventory of single-family homes on the market in Broward plummeted 48.7 percent in September to 4,872 from 9,495 in September 2011; the number of existing townhouses and condos for sale fell 43 percent to 6,143 in September from 10,774 a year earlier.

Those inventory levels constituted just a 3.4 months supply of single-family homes and a 3.7 months supply of condos and townhouses. An inventory of six to nine months of the sales volume is generally considered a balanced market.

A key reason for the tight inventory: Many homeowners are underwater or have little equity, creating little incentive to sell, especially in a market that is showing signs of improving.

Another sign of a firmer market: Single-family homes in Broward fetched 93.2 percent of their asking price in September, compared with 90.7 percent a year earlier. Broward condos and townhouses sold for 94.3 percent of their asking price, up from 90.2 percent in September 2011, the Realtors’ group said.

In a statement, Stephen B. McWilliam, president of the Greater Fort Lauderdale Realtors said: “There’s a strong support base for home prices now compared with a year ago. The number of months of supply of inventory is lower and sellers are still receiving most of their asking price.’’

Sally Forstadt, an agent with Coldwell Banker in Hollywood, said the market has been steadily improving. “I think generally buyers are feeling more confident,’’ she said.

In most of the transactions, Forstadt said, buyers are plunking down big down payments. “It’s not all cash, but they’re putting a significant amount of cash down, over 20 percent.’’



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