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Miami-Dade County residential market prices continue to rise as inventory trends downward.
“Our inventory is down 2.8% from last year and our sales are down 15.7%,” said Ron Shuffield, president and CEO of Berkshire Hathaway HomeServices EWM Realty, which works in the field for 40 years.
The current condo supply would last 7.4 months at the current sales rate, with 7,927 condos on the market and the median price is $410,000, Mr. Shuffield said.
“Today we have 3,984 homes on the market, which is 64% of the 6,220 homes we had on the market just before the pandemic and… early 2020. That was almost four years ago now, and sales are down 15.7%,” Mr. Shuffield said. “The reason sales aren’t higher is because we don’t have enough inventory. There are people who would like to buy, but we just don’t have a house to sell them to.
Due to low stocks, prices tend to increase. The healthy amount of inventory is six to nine months, Shuffield said.
“We are now at about a four-month supply,” Shuffield said. “When the market drops below six months of supply, prices continue to rise.
The median price of a home today is $600,000 in Dade County…and if you look back to 2008, the median price was $235,000.
High interest rates also affect the Miami-Dade residential market.
“Two years ago interest rates were 3% and today they are around 7%,” Shuffield said. “We’ve seen the interest rate more than double and of course that means people can only afford what they can afford on a 3% mortgage and the interest rate goes up to 7%. %-7.5%, then they can only borrow about 60% of what they could have borrowed before.
The interest rate as well as the lack of inventory have had a simultaneous impact on home buyers.
“This (high interest rate) has obviously had an impact on what our buyers can afford,” Shuffield said. “But what keeps prices high is the fact that we have very limited inventory. So if you only have a few homes for sale rather than a lot of homes for sale, people have to pay more because there are more bidders for fewer properties for sale.
The lack of inventory has been recognized by other professionals in the field, as have high interest rates and high migration.
“Overall, we are seeing a stable and strong market,” said Jay Phillip Parker, CEO of brokerage at Douglas Elliman. “We continue to see strong migration and reshoring trends from domestic and international buyers across the country. We recognize that about 3% of home buyers, which is a huge number, continue to look to move to Miami from other metros. The strength of these markets continues to come from New York, Boston, DC, Chicago, Los Angeles, and then the rest of the country.
As more businesses move to Miami, more and more homes are purchased. This creates a domino effect as the number of residents increases.
“Our business growth has really excelled since Covid,” Mr Shuffield said. “A lot of new businesses are moving here…and with those businesses, of course, come new jobs and these people are permanent residents who are moving here with their families, in many cases going to school. We love that, but we also love second home owners, vacation owners because they also bring a lot of value to all of our businesses.
Professionals are seeing an increase in the number of primary residence buyers, but that does not mean that the number of second home buyers has decreased.
“I don’t think we have fewer second home buyers, I think we just have more buyers for a period, and certainly more primary residents because… we had a huge influx of people during Covid who were looking for a more open environment to live in and they thought they would go back to where they came from,” said Alicia Cervera Lamadrid, managing partner and director of Cervera Real Estate. “A lot of them were from New York and stuff. »
“And what they discovered,” she said, “was that they really appreciated the quality of life in Miami. Beyond covid, they discovered that the people were nice, the schools were good, the business opportunities were phenomenal, the airport is great, etc. So they decided to make it a permanent residence. But that doesn’t mean the number of second home buyers has decreased, it just means the number of primary residents has increased.”
Mr. Parker noted interest in larger condominiums, more expensive units in buildings being purchased at a faster rate than usual and unit combinations.
“We are seeing a significant number of requests for unit combinations,” Parker said. “So a prudent developer typically develops two-bedroom, three-bedroom, four-bedroom, to allow for option, speed and sales. In many of our luxury products, we find people looking to combine maybe a two bedroom and a three bedroom, looking for more space to meet their needs.
Mike Pappas, CEO of Keyes Company, who has been there for 43 years, noted a cycle in the real estate market.
“Historically, we have a real estate cycle of about 10 years and they start at the bottom, usually through a crash or a crisis, and then they build a base and a base of renters who turn into first-time home buyers, then the first…temporary buyers turn into second-home buyers, and when there’s a frenzy for luxury, that’s usually the end of the ride,” Mr. Pappas said. “If you look back, if you assume that 2008 to 2011 was the bottom of the last cycle and 2021 was the top of that cycle, we readjusted to a new base, finding the bottom of 2022 and 2023.”
“I am optimistic,” he said, “because we are at the bottom of the market and there are signs of improvement for next year. This will build a new foundation for the future and realistically ensure strong performance over the next five to eight years, unless an external crisis stops it.
“We had a downturn in 1974, a downturn in 1981, a downturn in 1992 and a downturn in 2008, and now, in a sense, a downturn in 2022-2023… looking at the history of South Florida, it This is the pattern that we have seen, and we think we are at rock bottom or worst.
Professionals also cite buyer interest in different areas of Florida.
“There’s been an expansion in the scope of a potential buyer’s relocation to Florida, where historically…someone from New York would look to Florida, it was basically Miami Beach and nowhere else,” said Mr. Parker. “Buyers today are looking at all the markets: Miami Beach, Miami, Edgewater, Surfside, Bal Harbor, Bay Harbor, Coral Gables, Coconut Grove, but also, interestingly, people are exploring West Palm Beach, Fort Lauderdale, Jupiter . Most notably, what was traditionally a Midwest market on the west coast of Florida, this market has now expanded to capture the interest of buyers coming from the Northeast as well as the Midwest and West Coast of the United States. United.
The real estate market continues to fluctuate from year to year as factors such as interest rates and inventory trends impact different aspects of the market.
“Miami is a booming city, so if people are here and think they want to live here, I would tell them not to wait,” Ms. Cervera Lamadrid said. “I think the right time to buy in Miami is when you are ready to buy.”
