NAR: Existing-Home Sales Dip Slightly in September

by Peter Ricci October 22, 2013

Existing-home sales declined a bit from August to September, though housing inventory continued to show promising signs.

After hitting their highest level in nearly four years, existing-home sales came back down to earth in September, declining 1.9 percent to a seasonally adjusted annual rate of 5.29 million, according to the latest report from the National Association of Realtors.

That’s down from 5.39 million in August, though sales are still 10.7 percent above the 4.78 million recorded in September 2012; sales have now remained above their yearly marks for 27 straight months.

Existing-Homes Sales in September – a Slowing Market?

Something we should be clear on – the data we’re referring to is for September‘s housing market, meaning that the government shutdown, which took place in October, did not impact the data.

Other important stats in NAR’s report included:

• Median existing-home price for all housing types was $199,200, up 11.7 percent from September 2012; that’s the 10th straight month of double-digit yearly increases for median price.
• Distressed homes, meanwhile, accounted for just 14 percent of September sales, up from 12 percent in August but down from 24 percent in September 2012; 9 percent of sales were foreclosures, 5 percent short sales.
• In a very encouraging sign, housing inventory increased slightly from August to September, rising from a 4.9-months supply to a 5.0-months supply; inventory is only 7 percent below its 2012 level.
• Median time on market was 50 days, up from 43 in August but down from 70 in September 2012.
• And finally, data differed markedly by region: in the Northeast, sales were down 2.8 percent monthly but up 15.0 percent yearly; in the Midwest, the 5.3 percent monthly decline was matched by a 9.0 percent yearly increase; in the South, sales were down just 1.4 percent monthly, and up 9.9 percent yearly; and in the West, sales were up 1.6 percent monthly and 7.8 percent yearly.

Hillary Hertzberg, an agent with The Jills Group in Miami, said many of her housing markets remain quite busy, with Miami Beach particularly so with its quality inventory of homes and terrific schools.

“You have a great school system, you’re close to the ocean and restaurants – prices have been going up dramatically in Miami Beach,” Hertzberg said. “And as more and more people are interested, demand increases and prices continue to go up.”

An Expected Decline in Housing Activity

Lawrence Yun, NAR’s chief economist, said that September’s decline was expected.

“Affordability has fallen to a five-year low as home price increases easily outpaced income growth,” he said. “Expected rising mortgage interest rates will further lower affordability in upcoming months.”

And Gary Thomas, NAR’s current president, said the government shutdown could impact NAR’s next report.

“Just one impact of the recent government shutdown – delays in tax transcripts needed for approval of mortgage loans – put a monkey wrench in the transaction process and could negatively impact sales closings in next month’s report,” he said.

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Brazil’s turmoil boosts Miami’s real estate

Brazilian homebuyers continue to invest, simply changing their strategy

By Emily Schmall

Brazil’s reversal of fortune has been a boon for South Florida as cash-rich investors put more money into Miami-area bricks and mortar, brokers and real estate observers tell The Real Deal.

Brazil’s stock market has plunged 23 percent this year, rising inflation has further battered the value of the real to a four-year low and a wave of protests have crippled major cities. Miami leads the U.S. in total investment by international home buyers, and its overseas success exposes its thriving real estate market to changing economic realities abroad.

Government rates of up to 16 percent on money taken out of Brazil – meant to stem capital flight – simply mean Brazilian investors are changing their strategy, favoring real estate they can pay for incrementally, such as pre-construction projects, or that pays for itself, like rental properties.

Douglas Elliman’s top producing Miami broker Chad Carroll said Brazilians investors are “signing contracts left and right,” especially for rental properties, which are yielding ever higher returns.

Carroll recently showed clients, a Brazilian couple, a $2 million, four-bedroom condo finished and ready for immediate move in. The couple chose instead to buy two pre-construction units and combine them for roughly the same price. “The payment structure was more feasible, with the increments of deposits due over two years,” Carroll said.

Mayi de la Vega, the founder of One Sotheby’s International Realty, and another of Miami’s top brokers, said that if anything, Brazil’s loss has been Miami’s gain.

“I think directly proportional to this loss of wealth and declines in the stock market, it’s strengthened our real estate locally,” Mayi de la Vega, the founder of One Sotheby’s International Realty, told TRD.

Brazil is the top country of origin for Miami’s international home buyers, who constituted about 6 out of 10 sales last year.

While South Florida has drawn wealthy buyers from around the world, including all of the BRICs – Sunny Isles Beach goes by the moniker “Little Russia” – the Miami Association of Realtors claims Brazilians accounted for the largest share of Miami’s international sales in 2011 and 2012.

However, even if Brazilian sales were to taper off, Miami is well-positioned to benefit from foreign investors elsewhere, de la Vega said.

“I always find that when one country’s weak, another one’s strong. French buyers are desperately trying to take money out of there,” she said.

L.J. Rodriguez, the director of sales at Midtown, a massive residential and retail development in Miami, said that the turmoil of Brazil has fueled a spate of sales, with investors looking for fixed revenue from rents.

“Any potential downturn, we actually see as a positive because they’re going to find ways to hedge against their own economy,” Rodriguez said.

Most Brazilians – 78 percent in 2012 – paid for properties all cash, the association’s statistics show. Nearly half of buyers in 2011 said their intended use of the condo or house was as a vacation home for family and friends. A smaller share, 41.9 percent, gave that answer last year, with more buyers – 6.45 percent from 4 percent – saying they “don’t know.”

Increase in Sales and Boom in New Property Listings Driving Miami's Soaring Housing Market

 Sep 11, 2013

Miami's booming housing market in July was driven by robust growth in the sales of homes, condos and town houses valued $200,000 to $399,000 and the over $600,000 range along with a significant increase in the new listings of properties over $400,000, according to the 30,000-member MIAMI Association of REALTORS® and the local Multiple Listing Service (MLS) system.

"The double-digit growth in the sales of mid-range single-family homes, condos and town houses is driving Miami's robust real estate market," said 2013 Chairman of the Board of the MIAMI Association of REALTORS® Natascha Tello. "The fact that we are seeing such strong growth in the listings of both mid-range and high-end real estate is further evidence that there has never been a better time to invest in Miami. We are a vibrant community and our soaring housing market will be the backbone of Miami's continued economic prosperity and success."

Growth in Miami Single-Family, Condo & Townhouse Sales
Sales of Miami single-family homes valued between $250,000 and $299,999 drove July's historic housing rally with 131 closed sales, an increase of 138.2 percent from the previous year. Moreover, there were 128 sales of $300,000 - $399,999 homes in Miami, an increase of 88.2 percent from July 2012.

Meanwhile, 154 condos and townhouses ranging from $200,000 to $249,999 were sold, up 60.4 percent from 2012. The 100 luxury condos and townhouses sold at $600,000 to under a $1,000,000 represented the largest sales increase with a surge of 63.9 percent compared with July 2012 figures.

"We continue to see great demand for Miami properties in all price ranges, but a decline in available listings in the lower prices ranges is limiting sales under $100,000," said 2013 MIAMI Association of REALTORS® Residential President Fernando I. Martinez. "The lack of low-end supply is due to rising prices, which have steadily seen double-digit increases over the last two years. The rise in sales of mid-range properties is a result of pent-up demand."

Strong Growth in New Listings in the $400-599k Range
The Miami market has experienced robust sales activity for nearly three years, yielding double-digit appreciation consistently during the last two years. As a result, sellers who were waiting to recover equity have recognized that now is a great time to sell. Despite the uptick in new listings, supply remains insufficient to satisfy demand, particularly in the lower price points.

Condo and town houses make up 59 percent of all Miami property listings. Of the 2,838 condos and townhouses listed last month, the 344 valued between $400,000 and $599,999 increased 82 percent compared to July 2012. The second fastest growing group of newly listed townhouses and condos were the 338 valued $150,000 to $199,999, which saw a 63.3 percent growth from the previous year.

Of the 1,948 single family homes listed last month, there were 232 whose asking price ranged from $400,000 to $599,999, an increase of 81.3 percent from 2012. Notably, there were 169 new listings for single family homes over $1,000,000, up 53.6 percent from last July's 110.

July 2013 Single Family Homes and Townhouses/Condos Miami-Dade County Monthly Market Detail Reports

SoFla near bottom on list of U.S. housing affordability

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Fisher Island, one of Miami’s more affluent areas

Although the cost of living isn’t quite as steep as Los Angeles, New York, San Diego and San Francisco, South Florida is one of the least affordable areas for housing in the U.S., the South Florida Business Journal reported, citing a study from North Palm Beach-based Interest.com.

Miami and the surrounding South Florida market took 21st place for housing affordability among the 25 biggest metro areas, with Atlanta and Minneapolis topping the list. The median household income there is 25 percent below the level needed to buy a house at present interest rates. South Florida’s rank on the list plummeted from 14th last year, amid rising housing prices and mortgage rates.

Last October, the Center for Housing Policy releasing a study calling Miami the least affordable city in the U.S. Housing and transportation costs eat 72 percent of a moderate income household’s wages, compared to the 59 percent national average among the top 25 U.S. cities, the study had said. [South Florida Business Journal] — Mark Maurer