There is a certain appeal to the Miami real estate market. Everything related to the city’s housing sector is in high demand, from the most expensive luxury condos to trendy beachside bungalows.
And with the latest NeighborhoodScout’s data pointing to soaring appreciation rates of 342.69%, placing Miami in the top 10% nationally for real estate appreciation, the question on everybody’s mind is: what does the future hold for this booming real estate market? Read on for the answers.
How Active Is the Miami Real Estate Market?
In 2022, the Miami-Dade County real estate market celebrated its second-best total home sales year ever, with 31,627 homes sold. At 19,377, the annual condo sales also finished second all-time in Miami history.
Despite speculations that the Miami real estate market is experiencing a slowdown in activity, by November 2022, this prediction was obliterated by the fact that Miami’s single-family home market noted a 122% increase from 1.8 months to 4 months of inventory.
At present, Miami-Dade’s real estate market has a 3.3-month supply of houses and 5.1 months of condo inventory. So while the latest Miami real estate facts indicate that housing supply will increase by 20% in the next 24 to 36 months, which may navigate it toward a balanced market, sellers will continue getting top dollar for the time being.
Are Real Estate Prices Dropping in Miami?
There are no indications that real estate prices in Miami will drop any time soon. If anything, they have continued growing but at a slightly steadier pace compared to before the pandemic. Redfin’s data indicates the current median sale price in Miami is around $580,000, while other sources claim it went as high as $675,000, which is over $150K compared to the national average.
Moreover, data shows home prices in June 2023 were up 7.4% compared to last year. And even though homes are taking longer to sell this year or an average of 67 days compared to 46 days in 2022, the fact remains that they are selling.
Additionally, foreign real estate buyers find Florida the number one pick for one in four international buyers. From savvy entrepreneurs to home seekers, the Sunshine State is a mecca of opportunity for those looking into luxury real estate buying.
What Are the Trends in Miami Real Estate?
Foreign investments will continue to drive the Miami real estate market mainly because of its excellent geographical location.
After the initial dip during the pandemic, Miami’s real estate market saw a major uptick in foreign investors buying residential properties. To put it in numbers, between August 2021 and July 2022, foreign investors bought residential properties worth $6.8 billion, which is 34% more compared to the investment made the year before. What’s more, 66% of them paid in cash.
Cash payments are another growing trend in Miami real estate, and not just among foreign investors. In May 2023, almost 41% of purchases in Miami-Dade County were made in cash, which indicates that despite the rising mortgage rates, cash buyers remain undeterred.
By May 2023, cash sales accounted for 53.4% of existing condo sales and 24.3% of single-family transactions, highlighting Miami’s appeal to foreign buyers and those relocating from pricier U.S. markets.
Finally, for the first time since 1957, Florida is the fastest-growing state, with 1,142 net new residents per day. This, combined with the fact that global companies like Citadel continue relocating to Miami, it’s safe to assume that foreigners may even navigate real estate trends in the city.
Is Miami a Good Place to Have Rental Property?
Yes, with its competitive rental rates, Miami stands out in the region and the country. Despite the rates being much higher than the national average, people are still drawn to this vibrant city, undeterred by the higher cost of living.
Miami-Dade County ranks among the top 20 most expensive short-term rental markets in the US. This comes as no surprise, given that the current average monthly short-term rental income in Miami exceeds $3,000.
There is also the fact that 70% of the households in Miami are renter-occupied. This means that whether you’re a veteran real estate mogul or a new investor needing tips and tricks to make some extra income, buying a rental property in Miami is more than a wise investment.
Will the Miami Real Estate Market Crash?
It is improbable that the Miami real estate market will crash. As we’ve seen, the seller market remains hot, demand is still higher than supply, and foreign investments keep coming in.
Moreover, according to Goldman Sachs’s report, the Northeastern, Southeastern, and Midwestern markets are expected to see mild price corrections, if any. At the same time, investment bank forecasts say home prices in Miami will continue to rise.
Additionally, the Miami economy will continue to thrive as the latest U.S. Bureau of Labor Statistics data indicate that Florida’s Miami-Dade County had an unemployment rate of around 2.2% in June 2023. The national average for the same month is much higher at 3.6%.
To summarize, the thriving local economy, coupled with the economic growth that has resulted in increased demand from home buyers, should stabilize the Miami real estate market and make it even more favorable for buyers.
