The Miami real estate market continues to thrive, with strong housing prices and limited inventory. As more people and businesses relocate to South Florida from high-tax areas, the demand for homes in Miami is increasing. This, coupled with an influx of foreign purchasers, is positively impacting the state's property market.
Miami Housing Market Trends in October 2023
In October 2023, mid-market condominium sales in Miami-Dade County surged despite elevated mortgage rates. The MIAMI Association of Realtors reported an 18% increase in condo sales in the price range of $400,000 to $600,000 compared to the previous year. All-cash deals accounted for 51.7% of condo sales, almost double the national figure.
New Listings and Positive Signs
MIAMI Chairman of the Board, Ines Hegedus Garcia, expressed optimism about the market, noting that new listings in Miami have risen for two consecutive months. This increase in new listings, a 10.5% rise year-over-year, is seen as a positive sign for a high-demand, low-supply market. It is expected to provide more options for buyers.
Pending Sales and Miami Housing Market Outlook
The total number of pending sales in Miami increased by 0.51% year-over-year in October 2023. This positive momentum is evident in the rise of single-family pending sales and new listings across Miami-Dade, Broward, Palm Beach, and Martin counties. MIAMI REALTORS Chief Economist, Gay Cororaton, anticipates a strong housing market comeback in 2024, as pent-up demand is expected to materialize.
Sales and Inventory Dynamics
In October 2023, Miami experienced a 4.6% decrease in total sales compared to the previous year. Single-family home sales decreased by 1.5% year-over-year, while condo sales decreased by 7%. Despite the decrease in sales, the total inventory in Miami-Dade is still down significantly by 46.8% from the historical average.
Mortgage Rates and Market Response
Home sales in Miami are sensitive to mortgage rate changes. As of November 16, 2023, the 30-year fixed-rate mortgage averaged 7.44%. However, the National Association of REALTORS Chief Economist, Lawrence Yun, predicts rates to decline to the 6% range by spring 2024. It is worth noting that South Florida showing appointments declined by 1% year-over-year in October 2023, following five consecutive months of increase.
Home Price Appreciation and Economic Impact
Miami-Dade County continues to experience impressive home price appreciation. Single-family home median prices increased by 7.5% year-over-year, reaching $618,217, while existing condo median prices rose by 4.2% year-over-year, reaching $405,000. Miami is tied for No. 3 in the U.S. for annual home price appreciation according to the US CoreLogic S&P Case-Shiller Index.
The wealth migration to South Florida has significantly impacted local home prices, with an increase of $16 billion in South Florida household income in 2021. Miami's real estate market also posted a $240 million local economic impact in October 2023.
Market Stability and Distressed Sales
The Miami housing market remains stable, with only 1% of all closed residential sales considered distressed in October 2023. Short sales accounted for 0.3% and REOs accounted for 0.8% year-over-year. Miami's percentage of distressed sales is notably lower than the national figure of 2%.
Comparison with State and National Trends
Comparing Miami's real estate performance with state and national trends, Florida's closed sales of single-family homes and existing condo-townhouse sales experienced year-over-year declines. The statewide median sales price for single-family homes increased by 2%, reaching $410,000, while the national median existing-home price for all housing types in October was $391,800.
Market Dynamics and Cash Sales
Miami's real estate market continues to attract buyers, with cash sales representing 41.9% of all closed sales in October 2023. The median percent of original list price received for single-family homes was 96.9%, while condominiums received 96.6% of the original list price. Cash sales accounted for 51.7% of all Miami existing condo sales and 27.4% of single-family transactions.
Overall, the Miami housing market in October 2023 demonstrates resilience, positive momentum, and continued appreciation, making it a dynamic landscape for both buyers and sellers.
Miami Housing Market Predictions 2023-2024
The Miami metropolitan area is a prominent destination in the United States and the world. With the City of Miami at its core, along with Miami-Dade, Broward, and Palm Beach counties, it offers a diverse and thriving real estate market.
According to NeighborhoodScout's data, Miami real estate has appreciated 188.09% over the last decade, with an average annual home appreciation rate of 11.16%. This places Miami in the top 10% nationwide for real estate appreciation.
Current Market Snapshot
Zillow reports that the average home value in the Miami-Fort Lauderdale-West Palm Beach area is $472,733, reflecting a 5.4% increase over the past year. Properties typically go pending in approximately 22 days, based on data through October 31, 2023.
One-Year Market Forecast (October 31, 2023)
- Market Forecast: Zillow predicts a 1.8% increase in the Miami housing market over the next year.
- For Sale Inventory: As of October 31, 2023, the market has 32,330 properties available for sale.
- New Listings: In October 2023, there were 9,259 new listings entering the market.
- Median Sale to List Ratio (September 30, 2023): The ratio stands at 0.977, indicating a balanced negotiation between buyers and sellers.
- Median Sale Price (September 30, 2023): The median sale price is $442,958.
- Median List Price (October 31, 2023): The current median list price is $550,000.
- Percent of Sales Over List Price (September 30, 2023): 18.1% of sales closed above the listed price.
- Percent of Sales Under List Price (September 30, 2023): 66.4% of sales were below the listed price.
Is It a Buyer's or Seller's Housing Market?
The current market conditions in Miami suggest a balanced scenario, with a median sale to list ratio of 0.977. This indicates a fair negotiation equilibrium between buyers and sellers.
Are Home Prices Dropping?
As of the latest data available through September 30, 2023, there is no evidence of home prices dropping in Miami. The median sale price is $442,958, and the overall market has experienced a 5.4% increase over the past year.
Will the Miami Housing Market Crash?
Zillow's one-year market forecast predicts a 1.8% increase, indicating confidence in the market's stability. While real estate markets can be influenced by various factors, the current data and forecast do not suggest an imminent housing market crash in Miami.
Should You Invest in the Miami Real Estate Market?
Population Growth and Trends
Population growth and trends are crucial factors to consider when contemplating real estate investment in Miami. The city has been experiencing a steady increase in population, driven by both domestic and international migration. This consistent demand for housing makes Miami an attractive market for real estate investors.
Economy and Jobs
The strength of Miami's economy and job market is essential for real estate investment decisions. The city boasts a diverse and robust economy, serving as a hub for international trade, tourism, finance, and technology. A strong and diversified economy ensures a stable demand for real estate, both residential and commercial.
Strong International Market
Miami's real estate market benefits from a strong international presence. The city is favored by international investors who consider it a safe and attractive place to invest in real estate. This global demand for properties adds stability and growth potential to the local market.
Livability and Other Factors
Miami's lifestyle appeal, pleasant weather, and cultural attractions make it an appealing place to live. The city's tropical climate encourages year-round tourism, contributing to the demand for rental properties. Miami's diverse population and international business connections create opportunities in various real estate sectors.
Big Rental Property Market Size and Its Growth for Investors
Miami offers a thriving rental market, driven by its diverse population, strong job market, and international appeal. This steady demand for rental properties presents opportunities for real estate investors to generate attractive rental income. The Zumper Miami Metro Area Report shows that Miami has the most expensive rental prices in the region, making it a favorable market for investment.
When considering real estate investments in Miami, it is essential to stay informed about market trends, understand local regulations and property management, diversify your portfolio, and evaluate historical performance in different neighborhoods.
Highest Appreciating Miami Neighborhoods
When evaluating real estate investments, it is crucial to consider the historical performance of neighborhoods. The following Miami neighborhoods have demonstrated significant appreciation since 2000, making them noteworthy areas for potential investors:
- Downtown North: Located in the heart of Miami's downtown area, offering proximity to amenities and growth potential.
- Little Haiti South: A cultural hub attracting artists, creatives, and entrepreneurs, making it a promising area for investment.
- Overtown North: A historic neighborhood undergoing revitalization efforts, presenting opportunities for investors.
- Overtown West: An emerging area with ongoing community development and potential for long-term appreciation.
- Downtown Southeast: This neighborhood has witnessed significant urban development and appreciation, making it an attractive choice.
- Downtown Northwest: With its proximity to downtown Miami, this neighborhood offers advantages for investors seeking a strategic location.
- Downtown: The central business and cultural district of Miami, offering a vibrant environment and investment potential.
- Downtown East: This area has experienced substantial appreciation and urban development, making it appealing for investors.
- Town Square: A vibrant urban setting with long-term growth potential, making it a compelling choice for investors.
- Park West: A neighborhood with strong appreciation, urban development, and investment opportunities.
References:
- Miami Realtors: https://www.miamirealtors.com/
- Zillow: https://www.zillow.com/miami-fl/home-values
- Miami Realtors News Releases: https://www.miamirealtors.com/category/news-releases/
- NeighborhoodScout: https://www.neighborhoodscout.com/fl/miami/real-estate
- Realtor.com: https://www.realtor.com/realestateandhomes-search/Miami_FL/overview