We just published our report on the Miami Coastal Community housing markets. This is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994.
Here’s an excerpt from the report:
The overall number of sales rose by 15.4% to 6,416 to the highest total since we began tracking this metric in 2006. The market share for non-distressed sales comprised 67.2% of all market sales, up from 46.6% in the same quarter three years ago…There were 9,490 listings at the end of the second quarter, 18.8% less than in the prior year quarter. Distressed inventory fell by 44.1% and non-distressed inventory was down by 12% over the same period…
The Elliman Report: 2Q 2013 Miami Sales [Miller Samuel]
The Elliman Report: 2Q 2013 Miami Sales [Douglas Elliman]
Aggregated Custom Market Data Tables [Miller Samuel]
Miami Market Charts [Miller Samuel]
Andrew Siff, a reporter for WNBC Channel 4 in New York did a great job articulating the tight inventory phenomenon we are seeing in both the region and nationally.
South Florida-based Douglas Elliman has translated the 4Q 2012 Elliman Report: Miami Sales that I prepare (I only took high school French) to Spanish and Portuguese, reflective of the significant demand from South Americans.
[click to open reports]
Since housing bust began, Condo Vultures has led the way with distressed new development information on Miami, a housing market that became branded for foreclosures and stalled new development activity after the mid-decade crash. Their name suggests someone who is picking over the dead carcasses of stalled condos built during the boom and no one has marketed themselves more thoroughly in this segment.
They seem to perform a lot of analysis through public record and have the inside track on data from developers not in public record. Good for them. It’s a niche they own. But with that dominance comes responsibility.
Their regular email press releases are chocked full of information hyperbole (as most newsletters are) but there is often a disconnect between the headline and the content (just like we see with the monthly NAR releases). Recently I observed that they stopped the dated approach of marketing properties as a percentage discount from original pricing. I do find the releases interesting to read but I worry about the accuracy of the messaging for the uninitiated. I found the latest one grating so I thought I’d break it down because it symbolizes the challenges and responsibilities of analyzing a market segment with limited transparency.
Here’s the headline:
That’s sounds quite dire, right?
Not really. In a pool of 600 units, 10 sold in 4Q12, down from 20 sales in 4Q11. Let’s delve into the rules of market trends:
Misuse of percentages – The results suggest a 50% drop in sales. And to use my favorite example of this technique, a market whose sales rise from 1 to 2 experienced a 100% increase in sales. Better to say 10 fewer sales or 1 more sale than last year when the numbers are so small.
Number generalization – There are no precise numbers being provided anywhere in this release yet the results are numbers-based …less than 10 sold in 4Q12 and more than 20 sales sold in 4Q11. If you are burning calories on providing approximate metrics worthy of a screaming headline, why not provide the actual numbers? If it was 9 and 21 or 1 and 29, the same logic would apply so why omit it?
Data set size – Based on the release, there were “about 600″ unsold from boom, new development condo listings in 4Q12, the same size as the prior quarter. However the release doesn’t provide the year ago quarter total. What if it was 1,200?…then the drop was proportional. Why not be transparent and just provide the actual numbers – they must have them to provide such “precise estimating.” The 10 sales or less total represents 1.7% of the inventory or even less depending on how many sales there actually were.
When I first read through this release I did some quick math – I took the 10 sales (or less) which represented 1.7% of the 600 unit market and wild guessed, based on general market activity, that this shadow inventory was at least 700 last year. So at this level, the 20 sales (or more) in 4Q11 would indicate a 2.9% share. With this logic, the sales market share of the shadow inventory fell from 2.9% to 1.7% over the year, a 1.2% drop in market share.
Should a 1.2% decline be described as a dramatic slow down? No, based on the info presented, the decline was more like a rounding error.
Tags: Condo Vultures
Here’s an excerpt from the report:
…The market pace within Miami’s coastal communities continued to quicken in the fourth quarter. Distressed sale market share and listing inventory continued to fall, prices trended markedly higher, properties sold faster with less negotiability, and international buyers continued to play a key role in demand.
All price indicators posted large increases from year ago levels; median sales price jumped 27.3% to $210,000, average sales price surged 27.8% to $402,626, and average price per square foot increased 21.5% to $260. A portion of these substantial gains was attributable to the continued decline in market share of lower priced distressed sales, which fell to a 3-year low at 40.2%. However, the average sales price of non-distressed condo and single-family sales still jumped 16.6% above prior year levels…
Miami was #3 after Dubai although that placement was exagerated by the drop in distressed sales in south Florida (and they will rise going forward). Still, Miami has come a long way in 2 years. Manhattan showed decline but most of that was attributable to the shift in mix to entry level sales as mortgage rates continue to fall to new record lows. However it’s quite interesting to look at Manhattan as more mundane a market than the super-luxury segment would suggest. Further proof that the top end is not a proxy for everything else.
Cities such as Dubai, Miami, Nairobi and London are increasingly considered investment hubs for HNWIs in their wider regions. In the wake of the Arab Spring, Dubai has been seen as a relative safe haven for MENA buyers while Venezuelan and Brazilian investors have looked to Miami to limit their exposure to domestic political and economic volatility.
HNWI = High Net Worth Individual
Here’s KF’s top line overview:
-Fifteen of the 26 cities tracked by the Prime Global Cities Index (58%) recorded flat or positive price growth in the year to September, but over the last quarter 20 of the 26 cities (77%) have seen flat or positive growth – indicating an improving scenario.
-The index now stands 18.7% above its financial crisis low in Q2 2009 with Hong Kong, London and Beijing having been the strongest performers over this period, recording price growth of 52.9%, 45.4% and 39.5% respectively.
-Five cities recorded double-digit price growth in the year to September; Jakarta, Dubai, Miami, Nairobi and London – a city from each of the five key world regions.
South Florida-based Douglas Elliman has translated the Miami market report I prepare to Spanish and Portuguese versions in order to better serve their clients, all in the name of increased market transparency.
[click to open reports]
It’s time to share my Three Cents Worth (3CW) on Curbed Miami, at the intersection of neighborhood and real estate in the Magic City. And I’m simply here to take measurements.
…Yes, Miami actually has four housing seasons (no, you can’t use good-great-good-great). Last week we released the 3Q 2012 Miami sales report with Douglas Elliman covered here on Curbed Miami so I thought I’d do a 2-fer breaking out the five regions in our coverage of the coastal communities. I went with condos due to the low volume of single family sales in some of the submarkets…
[click to read column]