Cash remains king as international buyers flood Miami
Local industry watchers know cash is king in Miami. Now, HousingPredictor data is proving just how royal cash really is in the tropical city.
Mike Colpitts, editor of HousingPredictor, notes that all cash home and condo sales are controlling the real estate market. Specifically, 65% of these residential real estate sales are all cash, according to the Miami Association of Realtors.
“Miami is a big exception in the nation’s residential real estate market—a wonderful story,” Colpitts tells GlobeSt.com. “Miami has good appreciation, and most of that is due to international buyers coming in to pick up the real discounted properties, condos and single family homes.”
Of course, this is nothing entirely new. HousingPredictor research shows that 66% of all sales were cash in January and 67% in 2011. Drilling down deeper, 54% of sales were distressed properties in February. HousingPredictor includes foreclosures and short sales in its distressed property category.
“About 50% of all the homes with mortgages in Florida have either been foreclosed, will be foreclosed or will be sold as short sales,” Colpitts says. “That’s just inevitable. There are places in Florida where 65% of all the homes with mortgages will easily be foreclosed or sell as short sales over the course of this recovery.”
But the picture is not as grim in Miami, where condo prices have been rising steadily over the past 12 months. A year ago, the average price of a Miami condo was $214,012. Today, that price has jumped to $270,300.
“Miami home prices have rebounded sooner and stronger than predicted, which is a very encouraging sign for the Miami real estate market,” Martha Pomares, 2012 Chairman of the Board of the Miami Association of Realtors, said in a statement. “Months supply of inventory has dipped below 5 months, as housing inventory continues to dwindle. Limited supply should further strengthen home prices.”
Cash sales accounted for 46% of single-family and 79% of condominium closings in March. Nearly 90% of international buyers in Florida purchase properties all cash. Nationally, all-cash sales were 33% of transactions in February, reflecting the stronger presence of international buyers in the Miami real estate market.
“Rising prices have resulted from an all-time Miami home sales record set in 2011,” 2012 Miami Association of Realtors Residential president Patricia Delinois said in a statement. “Miami not only attracts the highest percentage of international buyers and investors, but also has become the focal point of emerging markets, as worldwide buyers and investors recognize the benefits of investing in Miami.”