Ten-X, the nation’s leading online real estate transaction marketplace, has released its Second Quarter 2016 Economic and Single-Family Housing Market Outlook Report for Miami, which reveals that while home sales continue to improve, the area’s homeownership rate has fallen to its lowest level since bottoming out in mid-2014.
Homeownership in the Miami-Fort Lauderdale-Palm Beach metro, which has lagged behind the national average since 2009, measured 57.5 percent during the quarter, some 80 bps lower than its year-ago level, compared to the national homeownership rate of 63.6 percent.
“The Miami housing market continues to climb back from the devastation it suffered during the Great Recession, although both sales volume and pricing are still far below the peaks they reached during the housing boom,” said Ten-X Executive Vice President Rick Sharga. “The long term outlook for the market is strong, as population growth and employment trends are both positive. But there are some hurdles in the near term, as price appreciation has outpaced wage growth, and volatility in international markets may be slowing down purchases by foreign buyers.”
Miami Home Sales Increasing Slowly
Miami existing home sales continued to make gradual upward progress during the quarter, rising 3.2 percent from a year ago to a seasonally adjusted annual rate (SAAR) of 61,800 and marking a cyclical high, even as home sales remained well below their 2005 peak and sales growth lagged slightly behind the national growth pace of 4.4 percent. The inventory of homes for sale in Miami increased 16.3 percent compared from a year ago, while the average time a home for sale sat on the market climbed to a seasonally adjusted 83 days. Home construction – housing permits, starts and completions – remained low by historical standards.
Miami Home Prices Outpaced National Numbers
Home price appreciation, which has outpaced the national average for more than four years, continued its upward momentum in the second quarter, pushing the median existing home price in Miami to $244,196, an 8.1 percent year-over-year increase. While the increase marked a cyclical high, prices remained well below Miami’s 2007 peak, suggesting room for further growth.
As prices continued to rise and median family incomes dipped slightly, affordability levels for home purchases in Miami dropped 6.5 percent compared to last year
Economic and Demographic Fundamentals
Aside from wage growth, which continues to lag behind national numbers, Miami’s economy continued to expand during the second quarter of 2016. Employment rose 1.9 above its year-ago level, with the education/healthcare, professional/business services, retail trade, and leisure/hospitality sectors accounting for 55 percent of all jobs. Unemployment fell 90 bps from a year ago to 5.2 percent, just above the national rate. Both of these suggest a positive long term outlook for the Miami housing market.
Miami’s population growth of 0.9 percent in 2015 was above the national average, and the metro added 24,214 residents. Miami has a below-average percentage of residents between the ages of 25 and 44 years old, which are typically the prime home-buying years, and an above-average concentration of those 65 years and older.
Ten-X is the nation’s leading online real estate transaction marketplace and the parent to Ten-X Homes, Ten-X Commercial and Auction.com. To date, the company has sold 244,000+ residential and commercial properties totaling more than $41 billion. Leveraging desktop and mobile technology, Ten-X allows people to safely and easily complete real estate transactions online. Ten-X is headquartered in Irvine and Silicon Valley, Calif., and has offices in key markets nationwide. Investors in the company include Google Capital and Stone Point Capital. For more information, visit Ten-X.com.