IRVINE, Calif. and SILICON VALLEY, Calif., Nov. 8, 2017 /PRNewswire/ -- Home sales and prices continue to rise in the Miami housing market even as affordability becomes strained, according to a new report by Ten-X, the nation's leading online real estate transaction marketplace. Ten-X's Second Quarter 2017 Economic and Single-Family Housing Market Outlook Report for Miami found that homeownership in the metro area is at historical lows with little relief coming from new construction.
"The Miami housing market remains solid, but limited inventory of homes for sale and rising prices are giving first time home buyers fewer opportunities," said Ten-X Executive Vice President Rick Sharga. "As affordability becomes an issue, and with very limited choices, more residents look toward renting, and homeownership rates remain below the U.S. average."
Homeownership in the Miami-Fort Lauderdale-Palm Beach metro stood at 57.4 percent during the second quarter, down two percentage points from the first quarter and 80 basis points lower than one year ago. Miami's homeownership rate has been lower than the national average since the recession and has hovered between 57 and 60 percent since 2012.
Miami Homeownership Continues to Decline
Sources: US Census Bureau, Ten-X Research
Miami Home Sales Dip Slightly
Sources: IHS, Ten-X Research
Miami home sales are still recovering from their recessionary lows, and gains have been uneven. Home sales increased 0.6 percent year over year to a seasonally adjusted rate (SAAR) of 61,771 transactions, 70 basis points below the U.S. average.
The inventory of homes for sale during the quarter was 45,413, up 1 percent from a year earlier. The average time a home for sale sat on the market stood at a seasonally adjusted 97 days, which is 12.7 percent higher than a year ago. Home construction was subdued and is unlikely to pick up. Single family home completions were down 14.8 percent from the prior year and housing starts decreased 13.3 percent. Permits dropped substantially by 46.7 percent, suggesting that supply additions will continue to slow.
Miami Home Prices See Steady Rise
Sources: FHFA, Census, IHS, Ten-X Research
Home price appreciation stayed an upward trend during the second quarter, rising to $266,012, an 8.5 percent gain year over year. Affordability fell 8.6 percent year over year, as Miami homes remained significantly less affordable than apartment renting.
Economic and Demographic Fundamentals
Miami's strong economic expansion began cooling in the past year as annual job growth slid from 3 percent to 1.7 percent in the second quarter. Metro job growth continues to outperform the national average with local unemployment declining 8 percent from a year ago to 4.6 percent, a cyclical low.
Miami's diverse economy continues to shine. Education/healthcare services and professional/business services remained the region's two largest sectors with payrolls that measure close to national averages. Retail trade and leisure hospitality, Miami's third and fourth largest sectors, had significantly higher levels of employment than the country as a whole. Financial services, wholesale trade, and transportation/utilities comprised smaller shares of payrolls, but they were still larger than U.S. averages.
Miami's population grew a modest 0.8 percent in 2016 with a net gain of 20,352 additional residents. Metro net migration and natural population increases fueled Miami's overall growth, with the region experiencing an influx of 41,830 international residents.
Ten-X is the nation's leading online real estate transaction marketplace and the parent to Auction.com, Ten-X Commercial and Ten-X Homes. To date, the company has sold 300,000+ residential and commercial properties totaling over $50 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 Thomas H. Lee Partners, L.P. CapitalG (formerly Google Capital) and Stone Point Capital. For more information, visit Ten-X.com.