July was a solid month for Miami real estate, where the median price slightly increased than a year ago. However, on the sales front, we have started seeing an improvement with the luxury properties and even a slight price increase. This pattern will hopefully propel our home sales which have been steadily going downward for the last four months.
Economists note that sales may have been down because of lower inventory. In fact, the last time there was any substantial increase regarding housing inventory was back when Donald Trump was a mere Republican candidate for president, one among a field of 11.
On a national level, homes for sale have dropped over 12%, which is the most substantial year-over-year decline since back in 2013. In January 2018, there was a 3.1-month supply of homes. Anything less than a six-month supply has not been seen since the beginning of 2012, which makes this rather significant.
West Coast Real Estate
West Coast markets have been the largest recipients of this low-inventory situation. San Jose’s metro area has seen the most significant inventory drop year-over-year. This has also led to the most significant price increase, as is expected. When it comes to the number of houses available on the market, there are less than half as many this October than there were a short year ago. This has pumped prices up over 19% with a median price falling at about $1.05 million. Despite the costs, the lack of inventory has led to homes finding a buyer very quickly, sometimes in just few weeks.
With the House of Representatives and Senate still hacking away at tax reform strategies through the month, many homeowners have chosen to step back from the market until more information is known. This is based on the potential for reduction of local and state property and income tax deductions, along with the possibility of changes to the mortgage interest deduction.
However, others have acknowledged that the implementation of these changes is unknown, so others have been open to buying despite the current uncertainty. Experts believe that once a tax bill goes through, it is likely that homebuyer demand will drop in high-tax states, especially where homes are more expensive. This likely would happen slowly over time.
Looking at metro areas, Seattle, Washington leads the pack when it comes to homes finding a buyer. In 2016, it took about 13 days, but in 2017 it is down to only 10. Other markets of note are San Jose with 12 median days on the market and Boston with 14 days. Oakland and San Francisco are just below those with houses on the market an average of 15 days.
For off-market homes, the median value was just over $250,000, which is up a little over half a percent from September. Much like 2017, just under half of the houses for sale been priced higher than estimates based on a home’s measured value and predictions about final sales price. This led to houses for sale at just a bit above expert forecasts after analysis.