Dataquick: Miami Region February Home Sales

Miami-area home sales rose last month to the highest level for a February in five years as an increase in activity above $200,000 made up for a decline in sales below that threshold. The shift toward more sales in mid- to high-end communities helped push the three-county region’s median sale price up on a year-over-year basis for the second consecutive month, a real estate information service reported.

In February, 7,690 new and resale houses and condos closed escrow in the metro area encompassing Miami-Dade, Palm Beach and Broward counties. That was up 2.0 percent from the prior month and up 4.5 percent from a year earlier, according to San Diego-based DataQuick. The firm tracks real estate trends nationally via public property records.

Typically sales in the Miami area drop between January and February. On average, sales between those two months have fallen 5.3 percent since 1997, when DataQuick’s complete Miami-area statistics begin. The sales tally for this February got a boost from the leap year, which added one extra business day to the month.

February’s total sales were 11.8 percent lower than the average February sales tally of 8,720 since 1997. However, if newly built homes are excluded from the sales mix, then the number of houses and condos that closed escrow in February was 4.7 percent above the historical average for that month. Although the Miami region’s new-home sales rose 2.7 percent in February compared with a year earlier, and were the highest for that month since 2009, they were still 75 percent below the average of 1,802 sales for a February since 1997.  New-home sales have risen year-over-year for the past four months.

When sliced up by price segment, February sales saw a year-over-year decline of 7.3 percent for homes priced below $100,000, and a 1.9 percent annual decline for homes below $200,000. Sales above $200,000 posted a 17.1 percent annual gain, while the increase was the same – 17.1 percent – for sales between $200,000 and $600,000. The number of homes that sold for more than $800,000 rose 13.7 percent from a year earlier.

In the Miami region’s multi-million-dollar luxury market, the 55 homes that sold for $2 million or more in February represented a 5.8 percent increase from a year earlier. During the first two months of this year 111 homes have sold for $2 million or more, up 9.9 percent from the same two-month period in 2011. The figures are based on public property records, where either a price or loan amount was available. 

In the overall market, the median price paid for all new and resale houses and condos sold in the Miami region in February was $135,000, up 3.8 percent from January and up 12.5 percent from a year earlier (the highest increase since a 13.4 percent annual gain in April 2006). February’s year-over-year increase was the second in a row. Prior to January this year, the median hadn’t risen on a year-over-year basis since September 2007. The median stopped falling year-over-year in December 2011, when it was exactly the same as a year earlier.

Despite the sharp gain compared with a year ago, the February median stood 53.4 percent below the Miami area’s peak $290,000 median in June 2007. 

There are multiple reasons for the median’s 12.5 percent increase compared with a year earlier, which followed a 6.1 percent year-over-year gain this January. In addition to widening price stability and any price pressures that might be forming in some submarkets, there was a shift toward more homes selling in mid- to higher-end neighborhoods. Also, a slightly higher share of resales this February were single-family detached houses, which typically sell for more than condos, and there was a slight gain in the portion of overall home sales occurring in Palm Beach and Miami Dade counties. (See below for details on the impact of a bulk purchase of relatively high-end condos in Miami Beach).

Palm Beach’s overall median sale price was $130,000 in February, up 1.3 percent from a year ago, while the overall median was $160,000 in Miami-Dade County, up 18.5 percent from a year ago. The median for all homes sold in Broward County was $115,000, up 15.0 percent from a year earlier.

For resale single-family detached houses, Palm Beach’s $173,500 median sale price in February was down 3.6 percent from a year ago, while Miami Dade’s $155,000 median was up 3.3 percent and Broward’s resale house median, which was also $155,000 in February, was up 5.8 percent year-over-year.

In the resale condo category last month, Miami-Dade County saw a dramatic gain in its median sale price. The resale condo median surged to $150,000, up 18.0 percent from January and up 42.9 percent from a year earlier. But there’s a catch: About half of that annual increase can be explained by a bulk purchase of 181 condo units by a limited partnership in February at a single luxury hotel-condo project in Miami Beach (all of the transactions were recorded on the same day). Excluding the sale of those relatively high-end 181 condos, which ranged from $233,000 to $1,648,700 , Miami-Dade’s resale condo median in February would have been about $20,000 lower, or $130,000. That would have made for a 2.4 percent increase in the resale condo median compared with January, and a 23.8 percent year-over year gain. Also, that single bulk purchase – with units selling for a median $391,800 – was enough to push the three-county region’s overall median sale price up by $5,000 in February.

Another bulk purchase in February saw a limited liability company buy 38 existing condo units in Miami, paying a median $158,700 per unit.

Palm Beach’s $80,000 resale condo median in February was flat compared with a year earlier, while Broward’s $72,950 condo median rose 12.2 percent compared with February 2011.   

Another key price gauge analysts watch, the median price paid per square foot for resale single-family detached houses, rose slightly in February to $86 for the overall region. That was up 1.8 percent from $85 in January and up 1.6 percent from February 2011. February’s year-over-year gain was the first since June 2010, when it rose 1.0 percent. The February figure stood 55.2 percent below the peak of $211 reached in May 2006.

At the county level in February, the median paid per square foot for resale single-family detached houses was $76 in Broward County, the same as in January and up 3.3 percent from a year earlier – the second consecutive month to record an annual gain. The figure was $93 in Miami-Dade County, down 4.1 percent from January and up 2.6 percent from a year earlier – the third month to post an annual gain. Palm Beach County’s median paid per square foot was $96 in February, up 5.5 percent from January and down 0.9 percent from a year earlier.

Driving much of the demand for condos and other lower-cost homes are absentee buyers, who purchased a record 42.6 percent of all homes sold in the Miami area in February. That was up from the former record of 39.9 percent in January, and up from 38.3 percent a year earlier. Absentee buyers are investors, second-home buyers and others who indicate at the time of sale that their property tax bill will be sent to a different address. (Absentee statistics go back to January 2000). Absentee buyers paid a median $102,000 for all new and resale houses and condos that they purchased in February, up from $94,899 in January and $82,500 in February 2011.

February buyers who had a foreign mailing addresses in the public record represented 5.9 percent of total Miami-area home sales for the month, and accounted for 9.3 percent of the region’s sales of existing (not new) condos. Of all homes bought with a foreign mailing address last month, about 82 percent were existing condos. (Note: Not all foreign buyers use a foreign mailing address, hence cannot be tracked with public records.)

Nearly 75 percent of the Miami-area’s February buyers with a foreign mailing address were from Canada, while the rest were split among more than 30 other nations, including Argentina, Brazil, Israel, Venezuela, Columbia and France.

Many absentee buyers are also cash buyers, who purchased a record 68.7 percent of the Miami-area homes sold in February. That was up from 64.4 percent the prior month and 68.2 percent a year earlier. The prior peak was 68.6 percent in March 2011. Last month’s cash buyers paid a median $105,000, up from $95,000 in January and $89,000 a year earlier. Cash deals are where there was no indication of a purchase loan recorded at the time of sale.

Meanwhile, use of a form of low-down-payment financing that’s popular with first-time homebuyers – government-insured FHA loans – rose slightly again in February, to 38.0 percent of all home purchase loans. That was up from an FHA share of 37.7 percent of purchase loans the prior month but down from 42.0 percent a year earlier.

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