Miami residential real estate surges despite the coronavirus

photo via Wikimedia Commons

The Miami Association of Realtors reported that August saw a rise in house and condo sales in South Florida, surpassing sales from August 2019.

Miami-Dade County total home sales jumped 6.4% year-over-year, from 2,374 to 2,527, while single-family home sales increased 16.6% year-over-year, from 1,164 to 1,357.
This is promising as the market recovers to its state before the coronavirus pandemic interrupted it.

“Before the Covid-19 situation, the Miami-Dade market was exceptionally strong. Miami real estate had record low delinquencies, no subprime mortgage crisis, strong demand/low supply, low interest rates, strong population growth, demand from foreign buyers and tax refugees from tax-burdened states, high consumer confidence and a strong job market,” the association stated in a press release.

Despite a brief interruption during March and April due to the pandemic, association Senior Vice President Lynda Fernandez said, the real estate market in Miami is strong once more.

“We’ve seen COVID accelerate some of the trends that were already evident in the market,” she said.

The market for single-family homes in South Florida has increased, she said, as people in high-density areas look to move to areas with more privacy and open space.

“We are seeing an even greater interest in single-family homes… anything under a million dollars is a sellers’ market,” Ms. Fernandez said. “There’s a lot of demand and limited supply.”

Pending sales, she added, are the best indicator of future sales and the health of the market. Over the past three months, pending sales for single-family homes in Miami-Dade increased by nearly 20% each month, after bottoming out in April and May.

As single-family home inventory continues to decrease, median prices have continued to increase year-over-year.

Median sale prices for single-family homes in August 2020 were $300,000, up 13.2% from August 2019.

There’s a lot of demand and limited supply. Interest rates are playing a huge role – as long as they remain low, they’re expected to allow the momentum of the market to continue.

Carolina Bustillos, a Coldwell Banker real estate and investment consultant based in Surfside, agreed that the local market has fully recovered from its initial COVID-related dip – which she attributed to people still “digesting what was going on.”

She said this is the best time of the year for sales because of “winter birds” traveling to the area. Like Ms. Fernandez, she said people are seeking out more privacy, the type found in single-family homes.

What drives people to South Florida are the benefits that other states don’t have, like not paying state taxes, warm weather, and being more affordable than other places such as California, Chicago and New York, Ms. Bustillos said.

Jorge L. Guerra, the chair of the Miami association who is president and CEO of Real Estate Sales Force Inc., said a combination of pent-up demand and low mortgage interest rates are current drivers of the market.

“South Florida real estate activity is now stronger than it was before the impact of the pandemic,” he said in the release. “We expect this trend to continue as a result of strong demand for housing and very low interest rates.”

Angelo Gomez is a journalism and political science double major at Florida International University. He is a "huge Marvel and Star Wars nerd, lover of all sports and a politics geek."