The housing market in South Florida is robust. While inventory is still relatively low, home prices are rising. Many sellers are getting top cash in this seller’s market. It’s also because more Americans are moving to South Florida from high-tax, high-density places (no income tax, pro-business) as well as from other countries. The state of Florida’s real estate industry is also benefiting from an increase in overseas buyers.
The Miami metropolitan region is the seventh-largest in the country and the 72nd-largest in the entire world. Miami-Dade, Broward, and Palm Beach counties—the first, second, and third most populous counties in Florida—as well as the City of Miami, the metropolis’s commercial and cultural hub, are all included in the metropolitan region. Greater Miami encompasses a broader region known as the Miami-Port St. Lucie-Fort Lauderdale Combined statistical area, according to the United States Census Bureau.
To the north of Palm Beach County, this wider region encompasses Martin, Saint Lucie, and Indian River counties. Homes in the Miami-Fort Lauderdale-West Palm Beach metro area typically cost $455,761. Home values in the Miami-Fort Lauderdale-West Palm Beach metro area have increased 7.0% in the last year, and according to Zillow, they will increase 7.4% in the next year.
Even if mortgage rates are still high, the Miami real estate market is also still doing well. In a recent analysis, Goldman Sachs analysts anticipated that the Miami metropolitan area will be one of the few significant property markets that did not see a decline in home prices in 2023. Miami is one of only two sizable locations in the study that Goldman Sachs expects to see an increase in property values by the end of the year.
According to the MIAMI Association of Realtors and the Multiple Listing Service system, the Miami-Dade County real estate market had a great year in 2022 with 31,627 total homes sold and 19,377 condominiums sold, placing second all-time in Miami history. Miami’s real estate market demonstrated its resiliency and never-ending demand in 2022 despite the increase in mortgage rates. The 30-year fixed mortgage rate is currently 6.11%, down from 3% when it first began in 2022.
According to the Chief Economist of MIAMI REALTORS®, inflation will cause mortgage rates to drop to 5% to 5.5% by the end of 2023, which might lead to a more active housing market in the second half of the year. Although the entire inventory is growing, the premium market segment is where it is growing the fastest. Inventory in the $400K to $600K price bracket is still in low supply.
May 2023 Miami Housing Market Update
As single-family home sales in the $600,000 to $1 million price range experience a major spike in Miami-Dade County, the Miami real estate market continues to exhibit encouraging tendencies. Additionally, South Florida showing appointments have increased year over year. These conclusions reflect the continued development and potential of the Miami real estate market and are based on the most recent statistics provided by the Multiple Listing Service (MLS) and the MIAMI Association of Realtors (MIAMI).
With noticeable improvements in single-family home sales in the $600,000 to $1 million price range and increased showing appointments around South Florida, the Miami real estate market continues to show resiliency and expansion. Miami’s real estate market continues to be appealing to purchasers, especially cash buyers, despite obstacles like rising mortgage rates and a lack of inventory at certain price ranges. The Miami real estate market is positioned for continuous success with rising home prices and household income, making it a desirable location for both local and foreign purchasers.
Increase in Single-Family Home Sales in Miami-Dade:
Miami-Dade County saw a startling 12.9% increase in single-family house sales in the $600,000 to $1 million price range in May 2023 compared to the same month last year. A total of 342 transactions were completed as a result of the upswing, demonstrating a rising demand for homes in this price range.
In South Florida, a rise Appointment Display:
Along with the uptick in property sales, showing appointments in South Florida increased year over year as well. 248,540 showing appointments were scheduled in May 2023 compared to 245,225 in May 2022, an increase of 1%. This increased trend in appointments is a crucial leading sign for upcoming regional real estate transactions.
Mortgage rates and the percentage of cash sales in Miami-Dade
In Miami-Dade County, cash sales witnessed a modest uptick, rising from 37.9% in April 2023 to 40.9% in May 2023 for all existing house purchases. Cash purchasers are still willing to purchase despite rising mortgage rates. Cash purchases made up 24.3% of single-family deals and 53.4% of all existing condo sales, indicating Miami’s status as a popular market for overseas purchasers and those moving from more costly U.S. locations.
Total home sales decline:
Miami’s overall house sales fell by 24.6% year over year in May 2023, despite good improvement in the single-family home and condo markets in the $600,000 to $1 million price bracket. High mortgage rates and a dearth of inventory at some price points are to blame for this downturn.
Increase in Household Income and Home Prices in Miami:
The median price of a single-family home in Miami-Dade County rose 7.8% from the previous year in May 2023 to $620,000. The longest-ever string of price growth for Miami single-family houses has lasted for the past 138 months. Additionally, MIAMI REALTORS®’ examination of movement data showed that in-migration will be responsible for an increase in South Florida household income of $16 billion in 2021.
Stock and fresh listings:
Miami-Dade County’s inventory is still quite low even though the total inventory is slowly rising. Total inventory was 9,331, which was 58.9% below pre-pandemic levels in May 2023. Both single-family homes and condominiums saw a decline in the number of new listings, indicating a competitive market with few options for purchasers.
2023–2024 Miami Housing Market Forecast
What forecasts are there for the Miami real estate market in 2023? The average yearly property appreciation rate in Miami over the past ten years has been 11.16%, according to statistics from NeighborhoodScout, placing Miami in the top 10% of all U.S. cities for real estate appreciation.
Let’s examine the price developments noted by Zillow over the previous 12 months. In recent years, the Miami property market has shown signs of expansion, and typical home values have been steadily rising. Miami-Dade County’s average home value as of May 2023 is $485,431, a rise of 7.9% from the previous year. Miami’s real estate market is competitive, as evidenced by the average 26-day pending time for homes.
For the Miami-Fort Lauderdale-West Palm Beach region, the outlook is still favorable. The average home value in this area is $455,761, an increase of 7.0% over the previous year. The market continues to move quickly, with properties going pending in around 25 days.
In the coming year, property values in the Miami area are expected to rise by 7.4%, according to the market projection. This suggests that house prices may continue to rise and appreciate. Furthermore, the median sale-to-list ratio is 0.972, indicating that homes are selling for about what they are advertised for.
As of April 30, 2023, the market exhibits evidence of competition with 13.5% of sales occurring above the list price and 71.0% occurring below the list price. These figures emphasize the significance of price tactics for both buyers and sellers in order to successfully traverse the market.
The median days to pending is at 25, which represents a relatively quick market environment in terms of transaction speed. Both buyers and sellers should be ready to accept or reject offers swiftly.
It is crucial to remember that these forecasts and market circumstances are based on information that is currently available as of May 31, 2023. Economic conditions, interest rates, and the availability of housing are just a few of the variables that can affect real estate markets. For the most recent information and advice, buyers and sellers should keep educated and speak with real estate experts.
With rising home values and a competitive market, the Miami housing market overall continues to display positive tendencies. These variables point to a promising prognosis for both buyers and sellers in the near future.
Are there good investment opportunities in Miami real estate?
Whether you are in Miami or somewhere else in the world, investing in real estate successfully depends on knowing when to buy and sell. It might be difficult to know when to enter the real estate market. Is Miami a Good Place to Invest in Real Estate? Many real estate investors have pondered whether making a Miami real estate purchase is a wise financial decision.
In Miami-Dade County, Miami is a relatively walkable metropolis. Miami is a popular tourist destination, but it occasionally makes the news when a hurricane appears to be headed its way. Miami, on the other hand, is a sizable, bustling city with a robust housing market. There are just under 500,000 people living in Miami.
The Miami housing market, which serves more than five million people and parts of southeast Florida, is significantly bigger than that. As a result, Miami is home to the seventh-largest real estate market in the country, ranking as the second-largest in the Southeast. Strong In-Migration and Other Market Fundamentals in Miami Real Estate Make It a Great Place to Invest in Real Estate.
What Are The Best Motives For Investing In The Miami Real Estate Market?
- Homebuyers from states with high taxes and dense populations keep migrating to South Florida.
- According to data from the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) for Q3 2022, the number of people moving from New York, California, New Jersey, and other states that exchange their out-of-state driver licenses in Miami-Dade County is still rising by double digits.
- For the first time since 1957, Florida is the state with the fastest population growth (1,142 net new inhabitants daily as of the U.S. Census in 2022).
- International businesses keep moving to Miami, including Citadel, a multinational hedge fund that oversees $57 billion in assets and is building a $1 billion office tower in the city with plans to employ 1,500 people in ten years.
- With an unemployment rate of 2%, which is lower than the national average, South Florida has one of the best labor markets in the nation.
- In contrast to many other major markets, Miami prices have increased for over 11 years in a row, yet properties continue to sell quickly (in 35 days on average).
- The biggest international market in America is seeing a resurgence of foreign purchasers.
- According to our 2022 MIAMI REALTORS® Global Study, foreign purchasers spent $6.8 billion on residential homes in South Florida in 2022, a 34% increase from $5.1 billion in 2021.
- Cash purchases make up 42.4% of all transactions in Miami, which is much more than the national average of 28%. In Miami-Dade, about 60% of luxury buyers pay cash only.
- Statistics show that distressed sales are negligible, which is an indication of a robust market.
- Millennials approaching the peak home-buying age and the explosive expansion of the senior/retiree population are two examples of demographic trends.
- benefits of remote work expanding Miami, since there is no reason not to want to live in sunny Miami if you can work anywhere.
We have compiled ten favorable, fact-based factors for people who are eager to invest in the Miami real estate market, even though this article is not a comprehensive source to make a final investment decision for Miami. Long-term returns on real estate investments in Miami will be favorable due to the city’s steadily rising housing values. Let’s talk about the Miami real estate market presently, which will be beneficial to investors looking to purchase an investment property in this city.
Market is Relatively Affordable for Investors
The median home price in Miami-Fort Lauderdale-West Palm Beach ($570,000) is significantly lower than the prices in many other major markets, including San Francisco-Oakland-Hayward, California ($1.3 million), San Diego-Carlsbad, California ($900,000), Los Angeles-Long Beach-Glendale, California ($893,200), Seattle-Tacoma-Bellevue, Washington ($741,300), Boston-Cambridge-Newton, MA-NH
Miami is a Powerful Global Market
In 2011, just about a third of residents were immigrants. But since nearly half of them end up becoming citizens, we can conclude that Miami is simply seen favorably by immigrants. The quantity of international buyers in the Miami housing market is unique, though. Buyers from countries including Russia, Brazil, Argentina, Turkey, China, and the UK are acquiring houses here at a rate that is significantly greater than is typical. While some want to utilize the beachfront condos as holiday homes, others regard the real estate acquisitions as secure investments.
One explanation for the sizable Venezuelan expat community in Miami is that several Venezuelans purchased property there as a place to flee in case their home countries became unlivable. Both visitors and residents alike use the beach and wish to settle there. The subtropical climate throughout the year adds to the allure of Miami’s beaches. This explains why South Florida’s population as a whole has been stagnating while Miami-Dade’s population is increasing by about 2% annually. It is ranked as the fifth-fastest-growing area in the United States.
It is the top destination in the United States for foreign buyers. For the past ten years, Florida has been the top US market for international traffic. For individuals who desire to serve visitors, the Miami real estate market does offer an opportunity. The Port of Miami is referred to as the “Cruise Capital of the World” since it is the busiest port for cruise passengers worldwide. Tourists can rent from landlords if they simply want to take advantage of Miami’s beaches, cultural attractions, and sports teams or if they want to stay in the city for a week before flying home.
The Geographical Limitations
People are moving to many of the world’s hottest real estate markets for employment and quality of life, yet they are unable to build enough homes to meet demand. San Francisco is bordered by water on three sides, which is made worse by the city’s restriction on building height, which prevents them from expanding like New York City has. Where developers can build homes is restricted in Colorado and Utah by a combination of federal parklands and vertical mountains.
Miami is situated on a body of water, as we’ve already established. Miami has seen a boom in high-rise development, giving the city’s downtown the third-highest skyline in the country, although other places have restrictions to prevent high rises from obstructing the view of the water. Despite this, the Miami real estate market has grown to be the sixth most densely populated in the nation.
The significant retiree population is an intriguing feature to take into account in the Florida housing market. Due to their relative immunity to changes in house prices, many older people relocate to Florida for the pleasant climate. Existing residents who are older remain in their homes. As a result, the supply of homes for sale in the Miami real estate market is constrained.
That explains why, despite the lack of jobs, Tampa and Coral continue to be expensive areas. The majority of retirees who do occasionally leave the state opt to keep their Florida house as a second property rather than sell it. There is less competition for the restricted housing stock along the Gulf Coast because it is more of a tourist destination than a retirement community.
Growth in the Economy and Employment in Miami
For work, a lot of individuals relocate to Miami. Miami is Florida’s largest urban economy and the country’s twelfth-largest GDP. Miami was designated an alpha city by the World Cities Study Group based on its level of economic, social, and cultural activity. Before COVID-19, Miami’s unemployment rate was approximately 4%; it is today in par with the national average but frequently lower. The work market is only better in Orlando.
Miami-Dade County is a popular travel destination worldwide. Overnight visitors to Miami-Dade have climbed by 20% since 2011, while the number of hotel room nights sold has increased by 22%. Greater Miami saw 24.3 million tourists in 2019, up 4.6 percent from the previous year. A record-breaking 146,700 jobs were supported by travel and tourism in 2019. The local economy is mostly driven by MIA, PortMiami, and tourism, although Miami-Dade also has a thriving entrepreneurial culture among small enterprises.
Miami consistently tops the Kauffman Foundation’s list of U.S. cities with the most startup activity. In the last eight years, life has significantly improved for County residents who own their homes. The Redland Market Village, which will become a dynamic downtown destination in south Dade, is the county government’s one promising project that is now in the planning stages. During construction, this project will contribute $351 million and 2,600 employment to the local economy. Once finished, it will provide more than 400 additional employment in addition to the 800 now there, with a $40 million yearly economic effect.
A recent study from the University of Central Florida’s Institute for Economic Forecasting predicts that from 2022 to 2025, Florida’s economy would grow at a 3.0% yearly rate as measured by Real Gross State Product. Real Gross State Product increased by 6.9% in 2021 after declining by 2.8% in 2020.
As the labor market emerges from a sharp slump, payroll job growth in Florida will continue to surpass national employment growth. The labor market recovered by 2.6% in 2021 from year-over-year growth of -5.2% in 2020, and growth is predicted to reach 5.1% in 2022, 2.3% in 2023, 1.5% in 2024, and 1.2% in 2025. Florida’s average job growth between 2021 and 2024 will be 0.8 percentage points more than the national average.
The state’s ongoing efforts to cut its unemployment rate will be aided by Florida’s quickening job growth. The unemployment rate increased from 3.3% in 2019 to 7.9% in 2020, then dropped to 4.8% in 2021, 3.8% in 2022, and 3.5% in 2023 before increasing to 3.9% in 2025. It will then decline to 3.5% in 2024.
Future home starts will increase, but not nearly quickly enough to make up for the severe shortfall in single-family housing in the near future. A total of 156,762 starts were made in 2020; this number increased to 190,061 in 2021, but it will gradually decline to 182,663 in 2022, 162,425 in 2023, 156,911 in 2024, and then nudge up to 157,178 in 2025. Over this time, the rate of increase in home prices will slow as supply catches up to demand, tempered by rising mortgage rates and declining affordability.
Massive Rental Market in Miami
Rent in Miami is comparable to that of New York City, with two thirds of the population renting. This is partly a result of the large number of seasonal and temporary workers in the tourism industry. It is partially caused by the shortage of homes compared to demand. Additionally, it is partly brought on by the high cost of housing, especially inland, in comparison to local salaries. Due to this, a lot of real estate investors in Miami are purchasing single-family homes to be divided into numerous flats and rented out separately.
Given that it is the largest city in Florida, it naturally has a significant number of universities. However, Miami has become a center for education and research due to its global appeal and advantageous location, leading to the establishment of organizations like Florida International University. Within forty miles of Miami, there are approximately forty colleges and universities that are home to over 350,000 students. Ironically, Miami University, which is located in Ohio, is not one of them. However, the University of Miami, which has more than 17,000 students enrolled, is situated in Miami.
Newest trends in the Miami rental market
In Miami, almost 70% of homes are occupied by renters. In Miami, Florida, the average monthly rent for a 1-bedroom apartment is $2,800 as of July 2023. Comparing this to the prior year, there has been a 27% increase. The typical monthly rent in Miami for a studio apartment dropped by -5% over the previous month to $2,285. A 1-bedroom apartment’s average rent dropped by 3% to $2,800, while a 2-bedroom apartment’s average rent fell by 3% to $3,900.
- Currently, $3,900 per month is the average rent for a 2-bedroom apartment in Miami, Florida. Comparing this to the prior year, there has been a 32% increase.
- Currently, $5,000 per month is the average rent for a 3-bedroom apartment in Miami, Florida. Comparing this to the prior year, there has been a 39% increase.
- Currently, $6,750 per month is the average rent for a 4-bedroom apartment in Miami, Florida. This represents a 35% drop from the prior year.
The Zumper Miami Metro Area Report examined last month’s active listings from metro areas to identify the most and least costly cities as well as those where rents are rising the quickest. The typical monthly rent in Florida for a one-bedroom unit was $1,680. The most costly city was Sunny Isles Beach, where a one-bedroom apartment costs $2,880. Rent in Lauderhill is $1,550, making it the least costly city.
The top metro areas in which rents are rising are listed below. Because there is a high demand for rental homes in certain areas and substantial economic growth, you might consider investing there. Their previous annual growth in rentals can also be used to anticipate future increases or declines.
The Miami Metro Area Cities With the Fastest Rent Growth (Y/Y%)
- The fastest-growing rent was in Hollywood, up 45.9% from this time last year.
- Rent in Homestead increased by 40.4%, placing it second.
- Rents in Sunny Isles Beach increased by 22.6%, placing it third.
Miami’s fastest-growing cities Rents in the metro area (M/M%)
- The biggest monthly rental growth rate, 6.3%, was seen in Tamarac.
- Rent at Dania Beach jumped 6.1% last month, moving it up to second place.
- Hollywood came in third with a 6% increase in rent.
The Landlords’ High ROI
You can earn significant profits by making real estate investments in Miami. Due to the difficulty in purchasing due to the high demand for houses in southeast Florida, there is a huge pool of renters. Miami residents who pay more than half of their salary in rent are among the most financially burdened in the country, ranking second overall. Although the rents aren’t as high as they are in other parts of the country, the ROI is good given the lower property values than in places like Silicon Valley or the New York City real estate market. For instance, the typical cost of a home is about $350,000, while the average monthly rent is $1900.
While the median salary in the area is $50,000, a household making $70,000 a year would find paying $1900 a month in rent to be burdensome. Potential investors in the Miami property market will be happy to know that this is a landlord-friendly market, whether you’re renting to students, low-income workers, or snowbirds. There are no rent control legislation in Florida. There is no cap on security deposits, and if the rent is three days past due, eviction proceedings can begin. A seven-day conditional notice to vacate is required in cases of property damage, but a seven-day unconditional notice is permitted in cases of persistent lease violations.
Where Can I Buy Investment Properties in Miami?
Cash flow, in any real estate venture, is precious metal. Real estate investors have a variety of chances in the Miami real estate market, so you can select the rental markets you want to serve and earn from. It goes without saying that a productive investment is one that generates strong cash flow from Miami investment properties. On the other side, a poor cash flow indicates that you won’t have enough cash on hand to pay off your debt.
Therefore, the key to your success would be to locate the best investment property in Miami in a developing area. Be careful when making any real estate purchases. At the time you plan to buy, consider the nuances of the Miami real estate market. You should concentrate your search for the greatest real estate investments in Miami on areas with a comparatively high population density and employment growth. They both result in a high demand for homes.
Miami has 47 distinct neighborhoods. Brickell, Kendall, Aventura, Downtown Miami, Little Haiti, Mid Beach, Edgewater, Brickell, Wynwood, Miami Springs, South Point, Miami Shores, Hialeah, El Portal, Santa Clara, and South Beach are some of the well-known areas in Miami. Southwest Coconut Grove is the priciest neighborhood, with a typical listing price of $1.5M, according to Realtor.com. With a typical listing price of $280K, Model City is the community with the lowest cost of living. The typical monthly rent is $1,950.
Here are some of the top Miami Beach communities where you can purchase investment properties.
One of Miami’s trendiest and most affordable neighborhoods is Brickell. It is on the waterfront since it is situated on the Miami South Channel. The cost of a home here, though, is roughly $400,000 on average. Compared to outrageously pricey areas like Coconut Grove, which is a few miles to the south, this is a relative value. Brickell is conveniently close to that sizable job market because it is situated south of downtown Miami.
Due to the area’s dense population and high cost per square foot, it costs about 480 dollars. This is slightly over the Miami average. In contrast, the median rent in Miami-Dade County is $2600 per month, which is a little more than the $2450 average. Additionally, Brickell Key levies fees of about $2600 per month.
A few blocks separate Liberty City from Biscayne Bay. Its eastern border is formed by Highway 95, while its southern border is formed by Highway 195. A portion of the reason the typical home costs a quarter of a million dollars in this area is that it is so close to major highways. Despite the chill brought on by the coronavirus, this is a warm housing market because to the comparatively affordable south Florida real estate. Here, home prices increased by almost 10 percent year over year, and until 2021, no change is anticipated.
Another nearby community that isn’t nearly on the water’s edge is Overtown. I-95 and Highway 395 cut it in half. Because the Miami-Dade College Medical campus and other hospitals dominate the area, it is well-liked by medical workers. Here, a typical house runs about $200,000 in price. Property values had grown by a healthy 5% annually before to the coronavirus epidemic. The estimated home values for 2021 remain the same. Residents are drawn to the area since it is affordable, however the 1,650 monthly rent may be welcomed by the property owners.
Here are the top ten Miami communities for real estate appreciation since 2000, according to Neighborhoodscout.com.
- Downtown North
- Little Haiti South
- Overtown North
- Downtown Southeast
- Downtown Northwest
- Downtown East
- Town Square
- Park West
- Downtown Southwest
In Central Florida, Tampa is yet another fantastic real estate investment area. It is steadily expanding, prices are still modest, and there is a decent likelihood that real estate will appreciate significantly over the next few years. The Greater Tampa Bay area, which has a population of over 4 million, comprises the metropolises of Tampa and Sarasota. It is one of the most popular tourist locations in addition to being a beautiful urban area. It is one of the most popular rental housing markets in the country.
The demand for entry-level single-family homes is at an all-time high. Tampa ranks in the top 10% of cities nationwide for real estate appreciation with an average yearly real estate appreciation rate of 5.44% over the previous ten years. The Tampa metro region has less than 2 months of available inventory, which is a reduction of over 21.4% from the previous year. One of the main causes of rising housing prices is this.
For the majority of investors, purchasing or selling real estate is one of their most significant choices. Selecting a real estate expert or counselor is nevertheless a crucial step in this procedure. They are knowledgeable on important aspects of your niche markets, such as alterations in market dynamics, market projections, customer attitudes, ideal timing and locations, and interest rates.
In South Florida’s real estate markets, BRICKELLSOLD REAL ESTATE INVESTMENTS has a wealth of experience investing in turnkey homes and cash-flowing properties. By lifting the benchmark and offering outstanding real estate investment opportunities in numerous other growth markets across the US, we hope to inspire others and set the bar for our industry.
By reducing risk and boosting the profitability of your Miami investment property, we can help you succeed. Speak with an investment advisor who can assist you in creating a unique portfolio of Miami investment properties. Depending on the availability, we can assist you in locating “Cash-Flow Rental Properties” in some of Miami’s most desirable neighborhoods.
You can invest in some of the hottest rental property real estate markets in the United States, not only in Miami or Florida. Simply use this form to set up a consultation at your convenience. We’re ready to assist you in eliminating uncertainty from real estate investing. We support your success by analyzing and constructing total Miami turnkey real estate deals that reduce risk and maximize return.