Recently, in the newsmedia there has been a lot of talk about the increase in sales of homes nationwide which also led to the bump in stock market in the runup to the Thanksgiving Holiday. I'd like to take this opportunity to put a bit of local perspective on this latest sales trend:
75% of the houses sold between August through October in Miami-Dade County were priced under $300,000 and 23% of these sales were for homes listed under $100,000.
Price trends at the lower end of the market have been positive, however moving into the higher price ranges, those are areas that we are still seeing weakness. Typically, when the supply of homes for sale stands at a year or more, prices tend to fall. With a six- to nine-month supply, prices remain flat. When the supply drops below six months, sales activity begins to spur price appreciation, as it has for recent home sold and priced under $100,000.
Below is sampling of the supply of houses listed for sale in Miami-Dade in October, according to the MLS:
- Under $100,000: four-month supply
- Under $300,000: eight-month supply
- $300,000 to $1 million: 21-month supply
- Over $1 million: four-year supply
Miami Beach's luxury housing market falls into the upper end category, however, the supply is much more restricted due to the natural barrier (island community) limiting further supply. Also, virtually no new construction is currently taking place, so we're experiencing a decline in inventory levels for Miami Beach's 33139 and 33140 zip codes:
- $300,000 to $500,000: less than six month supply
- $500,000 to $1 million: 14 month supply
- $1 million to $2 million: 18 month supply
- Over $2 million: 23 month supply
The conclusion from the above referenced data - there is no room in the Miami Beach housing market for overpriced listings. The strongest demand is for turnkey (completely remodeled) homes, where the new owners do not have to make an additional investment into the property.
* Data Sources: MLS & Miami-Dade Public Records