Miami Real Estate Market: Prices, Trends, Forecast 2023 (2024)

. Home prices continue to climb and inventoryis still quite limited. It is a seller’s market with many sellers getting top dollar. It is also because more people and businesses in the United States are relocating to South Florida from high-tax, high-density areas (no income tax, pro-business). An increase in foreign purchasers is also helping the state of Florida's property market.

Miami Housing Market Trends in October 2023

How is the housing market doing? In October 2023, mid-market condominium sales in Miami-Dade County experienced a significant surge, showcasing the resilience of the South Florida real estate market despite elevated mortgage rates. According to the data released by the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system:

• Miami condo sales in the price range of $400,000 to $600,000 increased by 18% year-over-year, totaling 308 transactions.
• All-cash deals constituted a remarkable 51.7% of all condo sales in Miami, nearly 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 is seen as a positive sign for a high-demand, low-supply market:

• October 2023 witnessed a 10.5% increase in new listings year-over-year, rising from 3,196 to 3,533.
• The Miami-Dade market remains in a seller's market, but the influx of new listings 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, reaching 1,989 transactions:

• The 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, totaling 1,971 transactions. The statistics exclude the robust developer new construction market and volume:

• Miami single-family home sales decreased by 1.5% year-over-year, while condo sales decreased by 7%.
• 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%:

• National Association of REALTORS(R) Chief Economist, Lawrence Yun, predicts rates to decline to the 6% range by spring 2024.
• 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 its impressive streak of home price appreciation:

• Single-family home median prices increased by 7.5% year-over-year, reaching $618,217.
• 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 incredible wealth migration to South Florida has significantly impacted local home prices:

• In-migration boosted South Florida household income by $16 Billion in 2021.
• Miami's real estate market 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 and REOs accounted for 0.3% and 0.8% year-over-year, respectively.
• 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.
• Nationally, the 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%.
• The median percent of original list price received for condominiums was 96.6%.
• 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 the seventh-largest metropolitan area in the United States and the 72nd-largest metropolitan area in the world. The metropolitan area includes the City of Miami (the financial and cultural core of the metropolis), Miami-Dade, Broward, and Palm Beach counties which are the first, second, and third most populous counties in Florida. Greater Miami includes a larger area defined by the United States Census Bureau as the Miami-Port St. Lucie-Fort Lauderdale Combined statistical area.

This larger area includes Martin, Saint Lucie, and Indian River counties to the north of Palm Beach County. What are the Miami real estate market predictions for 2023? According to NeighborhoodScout's data, Miami real estate appreciated 188.09% over the last ten years, which is an average annual home appreciation rate of 11.16%, putting Miami in the top 10% nationally for real estate appreciation.

Current Market Snapshot

According to Zillow, the average home value in the Miami-Fort Lauderdale-West Palm Beach area stands at $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: The month of October 2023 saw 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

When considering investment in the Miami real estate market, population growth and trends play a pivotal role. Miami's population has been steadily growing over the years, driven by both domestic and international migration. Here's why this matters for investors:

• Population Growth: Miami's population has been on an upward trajectory, attracting residents from all over the United States and abroad. This influx of people creates a consistent demand for housing, making it an attractive market for real estate investors.
• International Appeal: Miami's international appeal is a significant driver of population growth. The city's vibrant culture, pleasant climate, and international business connections make it a magnet for individuals from around the world. For investors, this diverse population presents opportunities in various real estate sectors, including residential and commercial properties.

Economy and Jobs

Examining the economy and job market is critical for real estate investment decisions:

• Economic Strength: Miami boasts a diverse and robust economy. It's a hub for international trade, tourism, finance, and technology. A strong and diversified economy helps ensure a stable demand for real estate, both for commercial and residential purposes.
• Job Opportunities: The availability of job opportunities in Miami is a key factor for real estate investors. A thriving job market attracts professionals, and this, in turn, leads to higher demand for rental properties, as many newcomers prefer renting initially.

Strong International Market

Miami's real estate market benefits from a strong international presence:

• Global Investment: Miami is a favored destination for international investors. Buyers from South America, Europe, and other regions consider Miami a safe and attractive place to invest in real estate. As an investor, you can tap into this global demand for properties.
• Foreign Investment: Foreign investors often seek properties in Miami for various purposes, including vacation homes, second residences, and income-generating rental properties. This international interest adds stability and growth potential to the local market.

Livability and Other Factors

Livability and lifestyle factors contribute to the city's attractiveness:

• Lifestyle Appeal: Miami's lifestyle, with its beautiful beaches, cultural attractions, and vibrant nightlife, makes it an appealing place to live. This lifestyle appeal increases demand for both residential properties and rental units.
• Weather and Climate: Miami's tropical climate is a major draw for residents and tourists alike. The city's pleasant weather encourages year-round tourism and can contribute to the demand for rental properties.

Big Rental Property Market Size and Its Growth for Investors

Miami offers a thriving rental market:

• Rental Demand: The city's diverse population, strong job market, and international appeal create a substantial demand for rental properties. This is advantageous for real estate investors, as it means a steady stream of potential tenants.
• Rental Income Potential: Miami's rental market has significant income potential. Depending on the neighborhood and property type, investors can generate attractive rental income. High rental rates can translate into favorable cash flow for property owners.

The Zumper Miami Metro Area Report analyzed active listings last month across the metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Florida one bedroom median rent was $1,668 last month. Miami was the most expensive city with one-bedrooms priced at $2,690. Lauderhill ranked as the least expensive city with rent at $1,590.

Here are the top cities in the metro area where rents are increasing. You can think of investing in these places because they have strong growth and demand for rental properties. You can also use their historical annual growth in rents to help predict future increases or decreases.

The Fastest Growing Cities in Miami Metro Area For Rents (Y/Y%)

• Coral Gables had the fastest growing rent, up 16.3% since this time last year.
• Hollywood saw rent climb 14.7%, making it second.
• Hallandale Beach ranked as third with rent jumping 11.1%.

The Fastest Growing Cities in Miami Metro Area For Rents (M/M%)

• Miramar had the largest monthly rental growth rate, up 6%.
• Deerfield Beach rent increased 5.9% last month, making it second.
• Oakland Park was third with rent climbing 2.9%.

Other Factors Related to Real Estate Investing

When contemplating investment in the Miami real estate market, it's essential to consider these additional factors:

• Market Trends: Staying informed about market trends, such as price appreciation, rental rates, and property supply, is crucial. These trends can influence your investment strategy.
• Local Regulations: Understanding local real estate regulations, property taxes, and zoning laws is vital for investors to navigate the market effectively.
• Property Management: Whether you plan to manage properties yourself or hire a management company, efficient property management is key to successful real estate investments.
• Diversification: Consider diversifying your real estate portfolio in Miami by exploring different property types, from single-family homes to commercial properties.

Highest Appreciating Miami Neighborhoods

When considering real estate investments, it's crucial to evaluate the historical performance of neighborhoods. The following Miami neighborhoods have demonstrated significant appreciation since 2000, making them noteworthy areas for potential investors:

Downtown North

• **Appreciation**: Downtown North has experienced substantial appreciation in real estate values over the past two decades. This makes it an attractive prospect for investors seeking long-term growth.
• **Location**: Situated in the heart of Miami's downtown area, Downtown North offers proximity to key amenities, cultural attractions, and business centers.
• **Potential**: With its central location and upward trend in property values, Downtown North presents opportunities for investors interested in urban real estate.

Little Haiti South

• **Appreciation**: Little Haiti South has seen remarkable appreciation since 2000. This neighborhood's transformation has been driven by its cultural vibrancy and proximity to downtown Miami.
• **Cultural Hub**: Little Haiti South has become a cultural hub, attracting artists, creatives, and entrepreneurs. This cultural renaissance has boosted its real estate market.
• **Investment Appeal**: Investors seeking neighborhoods with both historical significance and growth potential should consider Little Haiti South.

Overtown North

• **Appreciation**: Overtown North's appreciation over the years highlights its potential for real estate investment. This historic neighborhood has witnessed resurgence.
• **Revitalization**: Overtown North has been a focus of revitalization efforts, leading to improved property values and a growing sense of community.
• **Investor Opportunities**: For those interested in contributing to the revitalization of a historic neighborhood while realizing financial gains, Overtown North is a compelling choice.

Overtown West

• **Appreciation**: Overtown West has undergone a transformation, with appreciating real estate values. This neighborhood showcases the potential for investors in areas undergoing positive change.
• **Community Development**: Overtown West's development initiatives have contributed to its growth. Investors can participate in community development projects while benefiting from rising property values.
• **Future Prospects**: Overtown West is a neighborhood to watch for those interested in urban redevelopment and investment in emerging areas.

Downtown Southeast

• **Appreciation**: Downtown Southeast's real estate market has shown consistent appreciation over the years. Its location and urban development make it an appealing choice for investors.
• **Urban Development**: Downtown Southeast has witnessed significant urban development, including new residential and commercial projects. This development has boosted property values.
• **Investment Potential**: With its ongoing urban transformation, Downtown Southeast presents promising investment opportunities for those looking to capitalize on urban growth.

Downtown Northwest

• **Appreciation**: Downtown Northwest has experienced notable appreciation in real estate values since 2000. Its proximity to downtown Miami and growth in infrastructure contribute to its appeal.
• **Proximity to Downtown**: The neighborhood's location near downtown Miami is a key factor driving appreciation. Residents enjoy easy access to the city's business and entertainment districts.
• **Investor Advantages**: Downtown Northwest offers advantages for investors seeking a strategic location and potential for long-term appreciation.

Downtown

• **Appreciation**: The central Downtown area of Miami has consistently appreciated in real estate values. Its status as the city's core business and cultural district contributes to this growth.
• **Economic Hub**: Downtown Miami is an economic hub, home to numerous businesses, cultural institutions, and entertainment venues. This dynamic environment supports property value growth.
• **Investment Opportunities**: Investors looking for real estate in the heart of the city should consider Downtown Miami, given its appreciation potential and urban vibrancy.

Downtown East

• **Appreciation**: Downtown East has seen substantial appreciation, benefiting from its location within Miami's thriving downtown district.
• **Urban Growth**: Downtown East has experienced growth in both residential and commercial developments. This urban expansion has contributed to property value appreciation.
• **Investment Appeal**: Investors interested in neighborhoods within the urban core of Miami should explore Downtown East's potential for investment and growth.

Town Square

• **Appreciation**: Town Square's appreciation since 2000 makes it a noteworthy area for real estate investors seeking long-term gains.
• **Location**: The neighborhood's location offers accessibility to key amenities and is situated in a dynamic urban environment that supports property value growth.
• **Investment Prospects**: Town Square provides investment prospects in a vibrant urban setting, making it a compelling choice for real estate investors.

Park West

• **Appreciation**: Park West has demonstrated significant appreciation over the years, positioning it as an attractive area for investors.
• **Urban Development**: Park West has witnessed urban development, including entertainment venues and commercial establishments. This development has enhanced property values.
• **Investor Opportunities**: Park West offers investment opportunities in a growing urban district with the potential for long-term appreciation.

References:

• https://www.miamirealtors.com/
• https://www.zillow.com/miami-fl/home-values
• https://www.miamirealtors.com/category/news-releases/
• https://www.neighborhoodscout.com/fl/miami/real-estate
• https://www.realtor.com/realestateandhomes-search/Miami_FL/overview