The Douglas Elliman 3Q 2013 South Florida Market Reports came out today for Miami, Fort Lauderdale, Boca Raton, and Palm Beach, giving an updated look at the goings on of our crazy real estate market. Here now, the author of all four reports, Jonathan Miller, has his own brand of sweet commentary on the Miami Report. Take it away Jonathan.
The 3Q 2013 Miami real estate market continued to build (sorry) momentum this quarter as a number of high water marks were reached as noted in our just released Elliman Report: Miami Sales 3Q 2013. An improving regional economy and heavy demand from international buyers and especially from New York continue to pressure the market. Here are some of the more notable benchmarks set this quarter:
·Highest median sales price reached in 5 years.
·Second highest sales activity since 2006 (when we began tracking).
·Fastest marketing time in 7 years.
·Distressed market share fell by half in 3 years.
·Inventory remains unusually low.
Keep in mind that these records are being set as we come from an historic low point after the market corrected in the middle of the previous decade, but the improving conditions have continued.
Falling Market Share of Distressed Activity
One of the key reasons for rising prices has been the market's shift away from being dominated by distressed activity just a few years ago. While there are still plenty of foreclosures and short sales, their share of sales and inventory have fallen sharply. In the third quarter, 32.4% of all sales (condos and single family) were considered distressed, roughly half the 62.9% distressed sale market share 3 years ago in the same quarter.
More Mortgages Used, But Still A Cash Market
Cash remains the preferred method of purchase accounting for 59.5% of all sales, the lowest market share in 3 years as distressed sales lose their dominance of the market. Condo sales rely more on cash than single family sales with 69.4% and 44% market shares respectively. Therefore the potential rise in mortgage rates over the next several years should probably have less impact on this market than typical markets with a much high share of purchase mortgages.
Identifying Which Inventory is Low
While the mantra in Miami and most housing markets in the US is "low inventory" it's not quite that simple. Overall inventory is down 8.2% from the same period last year, non-distressed inventory is only down 1.6% and distressed inventory is down 34.1%. Less opportunities for distressed sales investors in the coming quarters as low supply drives prices higher.
Of course I'm just skimming the surface of the four reports I authored that were released by Douglas Elliman today. You can pull down the 3Q 2013 reports for Miami, Boca Raton, Fort Lauderdale and Palm Beach at your leisure. I don't want to short change the other markets here so please take a look if you're interested in those markets.
· Douglas Elliman 3Q Market Reports [Douglas Elliman]