Miami-Dade housing prices up 12.5% on non-distressed sales
Miami-Dade County home prices are up 12.5 percent this year—if you don’t include the thousands of distressed properties currently dragging down the market, a new report found. Excluding foreclosures and distressed properties, Miami-Dade County has the fastest rebounding home market in the country this year, with prices up 12.5 percent since January, a new report from real estate research firm CoreLogic shows.
But with foreclosures and short sales accounting for more than 50 percent of home sales, overall prices are up only 0.9 percent since January in Miami-Dade. In Broward, overall prices have fallen 3.2 percent since January, according to the report, which uses an index of single-family home prices for June. Non-distressed prices in Broward are down 0.4 percent.
“The difference between the overall [home prices] and our index excluding distressed sales indicates that the price declines are more concentrated in the distressed sales market,” Mark Fleming, chief economist for CoreLogic, said in a statement.
Year-over-year figures are more bleak: Since June 2010, home prices are down 7.3 percent in Miami-Dade County and down 7.4 percent in Broward. Since 2006, home prices have fallen more than 55 percent.
Still, with inventory now declining, homebuyers who want a non-distressed property are facing diminishing supply and quickly rising prices, said Alicia Cervera Lamadrid, managing partner of Cervera Real Estate.
“Prices are going up—there’s less inventory,” she said. “We’re seeing staggering absorption. It’s a little worrying that we’re running out of inventory.”
Sans foreclosures, South Florida’s real estate market is appreciating significantly faster than more stable markets like Washington, D.C., and California’s San Francisco Bay Area.
After South Florida, the strongest non-distressed market this year is the San Jose metro area, where prices are up 9.9 percent since January. In Washington, D.C., non-distressed prices are up 2.6 percent this year.
In terms of sales, South Florida’s housing market has soared this year, with foreign buyers flocking to the region to purchase properties at steep discounts and with all-cash offers. Sales of existing homes are on pace to break a record, according to mid-year data from the Miami Association of Realtors. As a result of the sales bump—along with a severely slowed foreclosure process due to court document irregularities discovered last fall—inventory levels have fallen precipitously. There are about 30,000 properties for sale in Miami-Dade and Broward counties, down from 45,000 last year.
“It’s all about supply and demand,” said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realty. “The fact that we’re at six months of supply is really the sign that we’re turning this corner.”
Despite the positive trend lines, distressed properties, popular among cash investors, continue to put downward pressure on the overall market, with foreclosures selling for discounts of about 30 percent.
As more of those homes begin to be released onto the market in the second half of the year, prices could decline further, economists say.
SOURCE: Toluse Olorunnipa, Miami Herald