Brickell Skyline – Miami, Florida Photo: Adam Mizrahi
Foreign demand for condos is helping to push up sales of Miami property.
Single-family home transactions rose 2.9 per cent year-over-year in September 2015, according to the Miami Association of Realtors. Sales of existing condominums fell 8.3 per cent year-over-year, but they are competing with a significant rise in supply and a lack of access to mortgage loans for local buyers.
Indeed, condos are now selling in fewer days overall and at higher media sales prices, thanks to foreign buyers, who are not hindered by the lack of financing.
“Miami’s existing condominium segment remains on pace to finish 2015 as one of the top local sales years on record,” says Christopher Zoller, a 27-year Miami-based Realtor and the 2015 Residential President of Miami’s Association of Realtors.
Condominiums comprise a large portion of Miami’s cash purchases, with 62.4 percent of condo closings were made in cash in September compared to 33.8 percent of single-family home sales. Cash is preferred by international buyers, highlighting the demand for condos from overseas investors.
Miami overall is one of the most sought-after markets in the US for foreign buyers. In September, cash deals represented 48.7 per cent of Miami’s total closed sales, more than double the national average.
For local buyers, though, a large number of existing South Florida condominium buildings aren’t approved for Federal Housing Administration loans. Of the 8,523 condominium buildings in Miami-Dade and Broward Counties, only 29 are approved, according to statistics released earlier this year from the Florida Department of Business and Professional Regulation and FHA. Just .0034 percent of local condo buildings are approved for FHA loans. The US average is 30 percent.
“Increasing the number of local condo buildings approved for FHA loans will increase the ability for more South Florida residents to gain the dream of homeownership,” says Danielle Blake, MIAMI’s Senior Vice President of Government Affairs & Housing.
The median sales price for condominiums increased 2.8 per cent in September to $200,500 from $195,000 a year ago; Miami existing condo prices have increased in 51 of the last 52 months. Despite the increase in median prices, Miami’s residential properties are still a bargain globally: a 120-square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average, according to the National Association of Realtors. The price for the same condo in London ($960,840), Hong Kong ($776,280), and New York ($1.6 million) were at least five times higher.