Miami Real Estate Market: Watch Out for Big Trends
From its unique culture and attractive beaches to its bustling business district, the Miami real estate market is nothing short of fascinating. And it’s historically one of the most appealing areas for international and domestic buyers.
As with any other investment, it’s crucial to gain a comprehensive understanding of current trends and prices before you start spending your precious dollars. This will provide you with valuable insights into what to anticipate for various property types. In the following section, we will delve into an insider's perspective of the Miami real estate market, exploring recent pricing changes and demand trend forecasts.
Overview of the Miami Real Estate Market
Throughout 2022, the Miami-Dade County real estate market achieved a remarkable milestone, marking its second-highest home sales ever, with a staggering 31,627 properties sold. Similarly, the annual condo sales reached an impressive 19,377, also marking the second-highest position in Miami's history.
Recent reports indicate that the average value of homes in Miami has reached an impressive $557,679, marking a substantial 7.7% increase over the past year. Nationwide, the average home value is $348,853, noting a modest increase of only 1.2%.
The median listing price in Miami in June 2023 was approximately $675,000, reflecting a positive upward trend of 5.6% compared to the same period last year. In contrast, reports for May 2023 show that the median listing price across the US was just over $441,000.
The sale-to-list price ratio is currently 97.71%, indicating that only 2.29% of all listings in Miami sold below the asking price. Reports also show that properties have been selling faster since the beginning of 2023. In June, listings sold after an average of 58 days.
These figures emphasize the strong performance and desirability of the real estate market in Miami, making it an attractive prospect for prospective buyers and investors alike.
Key Real Estate Trends in Miami
The Miami housing market demonstrated strong positive trends in May 2023, with significant growth in single-family home sales and rising showing appointments across South Florida. Insights from the MIAMI Association of Realtors and the MLS system underscore the market's ongoing expansion and potential.
Single-Family Home Sales in Miami-Dade Are on the Rise
Notably, Miami-Dade County experienced an impressive 12.9% year-over-year surge in single-family home sales within the $600,000 to $1 million range in May 2023. This surge translated to 342 transactions, indicating robust demand for homes in this price range.
At the same time, showing appointments across South Florida rose by 1% year over year, from 245,225 in May 2022 to 248,540 in May 2023. This upward trend in appointments is a reliable indicator for future real estate sales in Miami and the entire region.
On the downside, even though the single-family home and condo segments in the $600,000 to $1 million range displayed positive growth, with Miami real estate trends revealing Edgewater and Brickell as the fastest-selling luxury condo markets, the overall home sales in Miami declined. And according to reports, the drop is by 24.6% compared to May 2022, mainly attributed to the elevated mortgage rates and limited inventory, particularly in specific price ranges.
There Is a Moderate Increase in Cash-Sales
Another interesting trend is that cash sales in Miami-Dade County experienced a slight uptick, constituting 40.9% of existing home purchases in May 2023, compared to 37.9% in April 2023. This data says that the increasing mortgage rates have minimal effect on cash buyers.
Also, cash transactions were particularly prominent in condo sales, accounting for 53.4% and 24.3% in single-family transactions. So if you’re considering buying real estate in Florida as an expat, you should know that Miami is gaining popularity among foreign buyers and those relocating from pricier US markets.
Miami Is Moving Toward a Balanced Market
According to the Miami Herald, on August 3rd, 2023, the real estate market in Miami-Dade had a 3.3-month supply of houses and 5.1 months of condo inventory. In May 2023, total inventory stood at 9,331, reflecting a 58.9% decrease from pre-pandemic levels. Both single-family homes and condominiums witnessed a decline in new listings, indicating a tight market with limited buyer choices.
And while it is true that the housing supply will increase by 20% in the next 24 to 36 months, bringing it closer to a balanced market, there is still a long way to go until it reaches that point. For the being, Miami-Dade County's inventory remains close to all-time lows, especially compared to last year’s records, which means that sellers can still expect to receive top dollar for their properties.
Appreciation Rate Is Skyrocketing
According to NeighborhoodScout’s data, Miami's real estate has experienced an impressive appreciation of 342.69% over the past decade. In percentage terms, the average annual home appreciation rate in Miami stands at 6.61%, ranking it among the top 10% nationally for real estate appreciation. The single-family home appreciation rate has also been steadily increasing for a record-breaking 138 consecutive months.
A comprehensive analysis of migration data has revealed that the influx of new residents has played a vital role in this remarkable growth. This influx has contributed to an astounding surge of $16 billion in household income throughout South Florida in 2021.
In 2021, new households relocating to Miami-Dade boasted an impressive average adjusted gross income of $229,300. Furthermore, the number of people moving to Miami-Dade reached 45,430 in 2021, representing a 15% increase from 2020 and a 20% increase from 2019.
Considering all this, it becomes evident that despite earlier speculations of a slowdown, Miami's housing market is thriving compared to other US markets. This boom in the Sunshine State is generating favorable outcomes for both homeowners and buyers alike.
Foreign Investments Are Driving the Miami Housing Market
From August 2021 to July 2022, foreign investors bought residential properties worth $6.8 billion, reflecting a solid 34% increase compared to investments made in the previous year. The interesting part here is that 66% of these purchases were made in cash, which means that foreigners are also contributing to Miami's economic recovery in a major way.
Also, for the first time since 1957, Florida has emerged as the fastest-growing state, with a daily influx of 1,142 new residents. Some are even tempted to experience the pros of living in a tiny home community in Florida just so they can enjoy the country’s breathtaking landscapes and the benefits of living in a no-income-tax state.
And then there’s the matter of global companies like Citadel, AerCap, and KruseCom that continue relocating to Miami. Citadel is a multinational hedge fund developing a $1 billion Miami office tower with plans to employ at least 1,500 employees, which is yet another proof that foreign investors will probably navigate and shape the future of Miami’s real estate landscape.
Miami Real Estate Market Predictions
Expectations for the Miami housing market are more than optimistic. Goldman Sachs's report predicts that the Northeastern, Southeastern, and Midwestern housing markets will experience minor price corrections or stability. And Miami's real estate is expected to see a continued upward trajectory in home prices.
Looking ahead, forecasts indicate a promising 7.4% rise in home values in 2024, signaling the potential for sustained growth and appreciation in property prices. The median sale-to-list ratio is satisfactory and implies that homes typically sell close to their listed prices.
Overall, the Miami housing market continues to exhibit encouraging trends, including escalating home values and a competitive marketplace. These indicators collectively point to a positive trajectory for both buyers and sellers in the foreseeable future.
Various factors, including economic fluctuations, interest rate adjustments, and housing supply variations, can influence real estate markets. This is why it is important for buyers and sellers who wish to venture into this lucrative market to stay informed and seek guidance from real estate professionals so they can make well-informed decisions.
