By Mike Colpitts
In Miami-Dade County all cash home and condominium sales are controlling the real estate market, with almost two out of three sales or 65% being all cash, according to the Miami Association of Realtors. Cash is king in the “Magic City” and it has been for some time. Some 66% of all sales were in cash during January and 67% in 2011.
Miami is a major exception in terms of many issues surrounding its real estate market. For the third month in a row, Miami home prices posted strong gains in February. The median and average prices are rising as the majority of the nation’s housing markets decline on home values.
International demand for discount priced condos and homes that have been foreclosed are part of the reason. Some 54% of sales were of distressed properties during February, which includes foreclosures and short sales. But the turn around in the Miami market may even be surprising for many locals, who have seen condo prices jump an average of 26.3% from one year ago, from $214,012 to $270,300.
Single family homes have increased 15.4% over the same period, according to the local multiple listing association. Rising prices have resulted from a new all-time sales record in 2011, ushered in by near record low mortgage rates and more foreign interest in the market than ever before.
“Miami home prices have rebounded sooner and stronger than predicted, which is a very encouraging sign for the Miami real estate market,” said Martha Pomares, chairman of the board of the Miami Association of Realtors. “Months supply of inventory has dipped below 5 months, as housing inventory continues to dwindle.”
The sales of existing homes in Miami, however, is starting to show a bit of a slowdown, increasing only two percent in February compared to a year ago. Condo sales also dropped 12% for the month compared to year ago levels, which could signal the beginning of a slowdown from its record pace.
“Miami not only attracts the highest percentage of international buyers and investors, but also has become the focal point of emerging markets, as worldwide buyers and investors recognize the benefits of investing in Miami,” aid Miami Realtors residential president Patricia Delinois.
A decline of the inventory of homes and condos listed for sale also provides a positive picture for the marketplace, with a 45 percent year-over-year drop. The U.S. housing inventory of existing homes rose 4.3 percent through the end of February.