The Miami real estate market has gathered its fair share of attention recently. Developers in the area are hard at work building new condos, apartments, and high-end homes all across greater Miami. And at record pace: inventory is at a high as people choose to settle in the city from across the country.

Looking closer at the housing market in Miami, which is one of the most energetic and investment-heavy towns in the U.S., there’s more than meets the eye. Discover the more subtle intricacies behind what’s actually happening in real estate in Miami, the Magic City.

MIAMI HOUSING MARKET FORECAST 2023

First, take a deep dive into the Miami real estate market by checking in on the data. Look at the cost of living for residents, chart where the home values are going, and target a few statistics that will tell you more about the future outlook of Miami real estate.

Home values increasing

Across Miami, the median value for a single-family home in the area is on the rise. As of February 2023, the average sits at just over $500k or $360 per square foot. That’s quite a noticeable uptick in values from February 2022, where values were about 18% lower than they are now.

However, if you turn your attention to luxury properties in Miami, buyers are in luck. Home values have fallen slightly for homes with over five bedrooms –– about 8% lower, to be exact. Experts are not seeing this boom in values in Miami alone, however. The neighboring cities of El Portal, Coral Gables, and North Westside all saw an increase in values of about 12-18%.

Rising interest rates

Across the United States, interest rates for mortgage loans are at an all-time high. In Miami alone, buyers can expect to take out a 30-year fixed-rate mortgage for about 6.4%. That’s an increase of over 3% since December 2022. Luckily, the rates have fallen slightly since January 2023, back to under 6.1%. Nevertheless, the cost of taking out a mortgage is not as favorable for home buyers as it was two years ago.

Positive Net Population Migration

One can track many of the above changes in the Miami real estate market to the area’s massive influx of new residents. Miami has blossomed to become the home of over 2.3 million people. That makes it the seventh-largest metropolitan center in the nation.

Not only does a boost in population make it easier for buyers to compete favorably for lower home prices, it encourages new developers to flock to the area, thus boosting inventory. However, this migration is not all good for buyers.

The cost of construction in Miami is among the highest in the lower 48. From 2021 to 2023, the cost of building a home in Miami climbed 15%. That figure helps to raise the total value of homes as inventory isn’t fully free to explode in time with the population rise.

MIAMI-DADE COUNTY HOUSING MARKET TRENDS 2023

The entire Miami-Dade County market for real estate mirrors what’s being seen in Miami proper. Population is at an uptick, demand is high for both rental properties and high end luxury real estate thanks to plenty of development that’s been geared at well heeled clientele.

However, high interest rates appear to be affecting the number of buyers who would usually invest in a smaller single-family home or decide to rent. Rents sits higher than national averages, which makes Miami attractive for luxury buyers but not so much for others.

MIAMI MEDIAN HOME PRICES 2023

The big picture view of the Miami housing market is that it is in a good position, with slightly rising home values and an increase of affluent residents bringing demand for high end real estate. International buyers are extremely motivated to invest in Miami real estate too.

However, it’s important to keep in mind a few facts. First, the number of building permits in Miami fell quite dramatically in late 2022. However, supply rose slightly in the same time period, indicating that sellers were once asking quite a bit higher than market value in the past. Buyers should look for a course correction in the coming months with a slight drop in sale prices. 

MIAMI REAL ESTATE MARKET: SHOULD YOU INVEST?

Investing in the Miami real estate market now appears to be a smart plan. Although the market favors buyers at the moment, there are several reasons to be optimistic as an investor. All figures indicate that the population will continue to ramp up, especially when it comes to luxury buyers. Lower income buyers look to be waning as development becomes more scarce.

READY TO FIND YOUR NEXT PROPERTY?

While this 2023 forecast is just that –– a prediction–– it looks like Miami is currently a buyer’s market although home values are booming. The population appears not to be letting off any time soon, and investment seems to be a smart decision. Things could change and often do, but now is as good a time as any to start hunting for a property in this popular city.

If you have any questions or comments about the Miami real estate market, or if you’d simply like to talk about your options when it comes to housing in Miami, reach out today! Contact the Oscar Puig Team for more information. They look forward to helping you on your next real estate venture.