The average home price in Miami-Dade County grew yet again in August, 2015, albeit at a slower pace compared last year’s growth. CoreLogic – a business and real estate analysis firm – reported that residential prices grew 7.4% in August compared to the same time last year. This number includes distressed properties. That statistic represents a slight decline from the previous month, during which home prices went up by 7.9% year-over-year.
In real numbers, the rise looks like this – the median selling price for single-family homes was $250,000 in August of 2014, and rose to $260,500 in August 2015. Condos enjoyed an even more drastic increase in median selling price, from $182,000 in 2014 to $204,000 in 2015.
In addition to price growth, sellers have been getting closer to their asking price than in 2014. The average selling price compared to list price was 96.1%, which represents a .7% increase year-over-year from 2014.
Even Slow Growth Is Good
As mortgage rates go up and single-family home inventory increases, the report predicts that the growth rate will continue its slowing trend. Experts, however, emphasize that this leveling off isn’t necessarily a negative thing.
2013 and 2014 brought with them a real estate boom that caused double-digit prices increases, which is generally regarded as unsustainable over the long-term. Part of the reason for that boom was high activity on the part of foreign investors; due to the strengthening of the U.S. dollar, their buying power has been subdued. The gradually slowing growth simply represents a shift from an extremely frenetic real estate market pace to a brisk, healthy pace.
Across Florida, home prices went up by 8.1% during August, when compared year-over-year. According to CoreLogic’s report, the national growth rate was slightly lower at 6.9%.
Only a few other areas across the nation showed stronger housing price appreciation than Miami:
• San Francisco – 10.7%
• Denver – 10.7%
• Dallas – 8.9%
• Portland, OR – 9.4%
• Seattle – 7.6%
According to CoreLogic CEO and president Anand Nallathambi, prices in these metropolitan areas “remain very strong reflecting higher demand and constrained supplies.” Adding to this, Nallathambi pointed out, “Continued gains in employment, wage growth and historically low mortgage rates are bolstering home sales and home price gains. In addition, an increasing number of major metropolitan areas are experiencing ever-more severe shortfalls in affordable housing due to supply constraints and higher rental costs. These factors will likely support continued home price appreciation in 2016 and possibly beyond.”
Sales Growth Slows Down
On the sales rate side of things growth has also slowed, partially due to an influx of new condo developments (see all Miami pre-contruction condos here) which refreshes inventory, giving buyers more choices. According to the Miami Association of Realtors, an organization boasting 38,000 members, residential sales in Miami-Dade County rose nearly 3% in August, from 2409 the year before to 2479. There was a minor 1% decrease in single-family home sales year-over-year when compared to August 2014, going from 1157 to 1145. Condo sales increased for that same month year-over-year, from 1252 to 1334.
Despite the slight decline in rate of growth, the fact remains that the Miami real estate market continues to enjoy steady growth, which is a healthy indicator for an area undergoing much construction and reshaping.