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Miami Homes Under Contract Up 70%

Contract activity on Miami homes a bellweather for market?

Date: Thursday, December 27, 2012, 3:04pm EST

More Miami homes were under contract in November, spiking by more than 70 percent from the same time last year.

More Miami homes were under contract in November, spiking by more than 70 percent from the same time last year.

Reporter- South Florida Business Journal
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Price increases seem to be spurring owners of single-family homes and condos to find common ground with buyers, both of whom collaborated to spike contract activity by 73.8 percent and 37.4 percent, respectively in November.

The total number of listings that went into contract, including residences, also skyrocketed, rising by 52 percent year over year. That growth was 19.1 percent less than in October, a lag attributed not to a dropoff in demand, but instead a shortage of inventory.

“Inventory shortage remains a problem for the Miami market, as the number of active listings drops year-over-year below what is considered a balanced market,” according to a statement from the 25,000-member Miami Association of Realtors. “While new listings are coming on the market, more inventory is needed to satisfy demand.”

Shortly after the economic downturn of 2008, there were plenty of properties on the market, but contracts were rare because sellers and buyers had a lot of distance between them in terms of price. Today, that space is getting narrower and narrower as demand grows for housing.

Helping to narrow that gap is the rise in important market indicators: The S&P/Case-Shiller Home Price Index released on Wednesday showed that home pricing in the nation continued to rise in October, year-over-year, with Miami recording a seasonally-adjusted increase of 8.5 percent.

Although pricing from September to October was down, the difference between the two months is basically flat at 0.65 percent, which mirrors the downward trend in the nation’s pricing during the same period.

Home price increases are on the uptick because of several variables including inventory that is shrinking and less foreclosed properties, which are usually discounted.

South Florida’s foreclosure rate has also been trending downard for some time.

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