As the real estate market across the country cools down in 2023, the Miami housing market is also experiencing a slowdown. Higher prices and mortgage rates have reduced demand, resulting in fewer and slower home sales. However, our housing market forecast for the Miami metro area predicts a different scenario for 2024. Home prices will rise at a slower pace, giving buyers more negotiating power and shifting the market towards more neutral territory. Let's explore the predictions for the Miami housing market in more detail.
Miami Housing Market Predictions Into 2024
- Home prices will continue to rise, but at a slower pace compared to previous years.
- Higher mortgage rates will have a cooling effect on the market, leading to longer selling times for homes.
- Miami will transition from a strong seller's market to a more balanced market.
- Buyers will enjoy more negotiating leverage as the market shifts.
- More properties will become available in the coming months.
It's important to note that real estate forecasts are educated guesses based on current and expected trends. While they provide valuable insights, they are far from certain. The Home Buying Institute cannot guarantee future housing market conditions.
Miami Avoids Home Price 'Correction' in 2023
In a paper published by investment bank Goldman Sachs, the company predicted a home price "correction" in the United States throughout 2023, with prices expected to rise again in 2024. However, the Miami metro area stood out as one of the few real estate markets that would avoid this correction and continue to experience price growth.
According to Fortune, Goldman Sachs expected home prices in Miami to rise by 0.8% in 2023, while many other markets would see slight declines. This indicates the resilience of the Miami housing market, with double-digit price gains setting it apart from other metro areas.
By May 2023, the median home value in Miami reached approximately $549,000, representing a 10.3% increase from the previous year. This level of price growth outpaced the national average, highlighting the strength of the Miami real estate market. However, a slowdown in home-price growth is anticipated in the coming years.
Homes Are Taking Longer to Sell
Despite positive predictions, the Miami real estate market has slowed down in recent months, and this trend is expected to continue into 2024. Reports show that it is taking longer to sell a home in Miami compared to the previous year.
In May 2023, a report from RE/MAX revealed that Miami had one of the highest "days on market" averages in the country. This metric measures the time between listing a property and signing a contract. Additionally, a June 2023 report from Realtor.com found that the Miami metro area had the highest number of days on market among the 50 U.S. metros analyzed.
These longer selling times indicate a relatively slow-moving market where homes are taking more time to sell, affecting home prices. However, this situation presents opportunities for buyers who have more negotiating power in the current market.
More Buyers Are Paying Below List Price
During the buying frenzy of 2021, many buyers in the Miami real estate market paid more than the list price due to low inventory and high demand. However, this trend is changing. Our prediction for the Miami housing market in 2024 is that fewer buyers will pay over the list price.
A report by RE/MAX showed that the Miami area had the lowest "close-to-list price ratio" among the 49 metro areas analyzed. This ratio measures how closely the final selling price aligns with the original listing price and reflects market demand and negotiating power. With a lower ratio in Miami, buyers have more leverage, and bidding wars are becoming less common.
Inventory Levels Have Risen
Over the past year, the supply of homes in the Miami metro area has increased, providing more options for buyers. Despite these gains, supply levels remain low compared to historical standards. According to RE/MAX, Miami had one of the highest levels of housing market supply, based on the "months of supply" metric.
While the increased supply gives buyers more choices, finding a property can still be challenging. If supply levels continue to rise as forecasted, the Miami housing market may become even more buyer-friendly.
Miami Economy Thrives
The thriving Miami economy is another factor contributing to the positive predictions for the real estate market. Miami-Dade County had an unemployment rate of around 1.8% in April 2023, lower than the national average. The strong local economy increases demand among home buyers, which puts upward pressure on prices.
According to the Miami-Dade Beacon Council, many companies are setting up shop in the Miami metro area. With commitments from 57 companies to expand or relocate to the county, thousands of jobs with competitive wages are expected. These trends are likely to attract more home buyers to the Miami real estate market in the coming years.
Conclusion and Summary of Predictions
In summary, the general forecast for the Miami housing market is that home prices will continue to rise, albeit at a slower pace. As the market shifts in favor of buyers, sellers will need to be more flexible and open to negotiations. The increase in inventory levels provides more options for buyers, while a thriving economy attracts companies and creates more jobs.
It's essential to remember that these predictions are educated guesses and not guarantees of future market conditions. However, they provide valuable insights for buyers, sellers, and investors interested in the Miami real estate market.
