Miami Real Estate Market Update - December 2022
Miami-Dade County Market News - December 2022
In this Miami Real Estate Market Update, you will learn the current real estate trends in South Florida. This includes information on the condominium market and the supply and demand of homes in the area. Also, you will learn about some new developments in the real estate market that could have an effect on how you choose to invest.
Lower mortgage rates will help investors increase cash flow from properties placed in operation
Low mortgage rates may not sound like a good time to invest in the real estate industry, but they have proven to be a gold mine for investors. Lower rates make it easier to purchase and operate properties, thus enhancing cash flow and ROI (return on investment). Despite the shaky state of the economy, multifamily construction in targeted in-migration markets such as Miami continues to benefit from favorable loan terms and conditions.
Considering the aforementioned reasons, it's no surprise that Miami has become the rental capital of the South. With more people emigrating to the Sunshine state, there's an increasing demand for affordable housing. The market is best suited to the savvy investor looking to take advantage of this demographic. It's no wonder that some of the country's largest apartment companies have set up shop in the Magic City. Whether it's an opportunity to make a killing or an eyeball grabbing trophy for the movers and shakers, the right moves will pay off in spades.
As with anything in life, the best bets aren't always the best ones. That's why it's important to choose your battle partners wisely. This entails assessing the slants and talons of your competition.
Higher interest rates should lead to more days on the market
The good news for real estate investors in the Sunshine State is that interest rates are heading down. A new report by Freddie Mac finds that the average 30-year fixed rate mortgage rate is down a full percentage point from January. If the rate holds, more buyers will be able to afford new homes in the area.
The Federal Reserve's decision to cut borrowing costs served as a stimulus for many homebuyers. Interest rates will eventually level out, and this should benefit homeowners in the long run.
The Miami housing market is not without its challenges. With more and more buyers flocking to the southern hemisphere, it's no wonder there are less available listings than a year ago. However, there's still room for improvement. Even with new construction, the inventory is not expected to ease anytime soon.
One of the smartest moves real estate investors can make is to start looking into financing options. There are a variety of options, from home loans to cash-out refinancing, and they should all be investigated.
Demand for real estate in South Florida is being driven by new residents and corporate relocations
In recent years, there has been a surge in demand for real estate in Miami. This is mostly driven by new residents and corporate relocations.
These newcomers are coming from other parts of the country and Canada. They're lured by the warmer weather and spacious homes. Many of them are looking for three or four bedroom houses.
The influx of newcomers has also created a demand for rental properties. The increase in demand for housing has driven up the prices of residential real estate in Miami. However, affordability will be a determining factor for the residential market.
There are a number of factors that will drive the future of the commercial real estate market in Florida. Some of these factors include:
In terms of residential real estate, the supply of homes will continue to favor sellers. But the days on market will start to increase.
Newcomers from out of state are attracted to the area because of the warm weather and tax benefits. Historically, this has had a positive impact on the local economy.
The current supply of homes in South Florida still favors sellers
If you're planning on buying a home in South Florida, you'll be pleased to know that the current supply of homes in the area still favors the seller. However, the market has changed in many ways over the past few months, and prices are not on the decline.
The latest housing statistics show that demand is on the rise in the greater Miami area. In fact, closed sales of single family homes in Florida reached 24,877 units in August. Considering the high demand and tight inventory, home prices have skyrocketed.
As a result, more and more buyers are relocating to South Florida. The best parts of the metropolitan area are getting the attention they deserve. From Miami Beach to Fort Lauderdale, the cities are attracting a lot of attention from buyers looking for the perfect place to call home.
While home prices are high, they're not as high as they used to be. This has opened up opportunities for investment in the area. A new wave of vertical development is beginning to take off in the south Florida metropolis. These types of developments incorporate today's building codes and safety standards.
A pandemic has caused housing prices to rise in a relatively short period of time
If you haven't heard of the pandemic, it's a global economic crisis that has caused housing prices to skyrocket. Luckily, not every market has been sucked in by this "pandemic". And even if your local market has gone under, there are still some bright spots.
Among these bright spots is the booming real estate market in Nashville. There's been a resurgence in demand for industrial and multifamily properties. As a result, new construction is adding to the supply of homes.
In the past two years, millions of Americans have gained equity in their homes. This wealth, along with lower interest rates, helped boost household incomes. But this growth also contributed to the housing affordability crisis.
One of the biggest factors contributing to the housing affordability crisis is the rising house-price-to-rent ratio. Although this ratio isn't exactly a perfect metric, it's a useful barometer for how much it costs to live in a particular city. The more the price of rents increases relative to income, the more expensive housing will become.
South Florida's condo market is booming
South Florida's condo market has been booming this past year. The area has one of the hottest rental markets in the nation. As demand and affordability rise, more and more businesses are moving to the region.
Home prices continue to rise, but the market's frenzy is slowing. Mortgage rates are rising and interest rate hikes are making it more difficult to find financing. This makes it more difficult for developers to start construction on new multifamily properties.
Miami Dade County is seeing the best sales of existing condos in the area's history. Sales of homes over $10 million have increased by 158% in the last two years.
Miami's single family home market also saw strong sales. Prices in the region soared, thanks to a large number of buyers who were willing to pay tens of thousands of dollars over the asking price.
There was a shortage of homes on the market, but that hasn't stopped buyers from bidding high. Inventory rose to 68,813 listings in the second half of the year. That's up more than 2800 listings from a year earlier.
Kirkland & Ellis will open a Miami at 830 Brickell
The Chicago-based law firm Kirkland & Ellis has announced plans to open an office in Miami. The move comes at a time when many professional services firms are expanding in the South Florida area in response to a growing number of technology and finance clients.
A month ago, Crain's reported that the firm was scouting out an office in Miami. Now, the firm has signed a lease at the 830 Brickell Tower. Located in the Brickell financial district, the tower is set to be completed in 2023.
Among the companies already leasing space at 830 Brickell are law firms such as Baker McKenzie, CI Financial, King & Spalding, Venable and Marsh. Several accounting and communications firms are also planning to move to the area.
In May, the firm's executive partner Jeremy Liss told Crain's that it would open its first Miami office in December. Kirkland & Ellis is known for government disputes, restructuring and intellectual property matters. It employs more than 3,000 attorneys in 18 offices worldwide.
Another major investment firm is joining the list of firms moving to the Miami area. Winston & Strawn is also opening an office at 830 Brickell.
South Florida's pandemic has caused housing prices to rise in a relatively short period of time
The real estate market in South Florida continues to break records. As a result, it is still a seller's market. However, it remains relatively affordable, particularly when compared to other major metropolitan areas.
While the housing market in Miami has seen a surge in demand, it is still far from a buyer's market. Homes in the $300,000 to 400,000 range are considered a good value. Home prices continue to rise, however, and it will take time for the supply of available homes to catch up.
According to Zillow, home prices in Florida are expected to rise by 16.8 percent in the next year. This includes both condos and single-family homes. A typical home in the state costs $430,068.
In Miami, the median price of a single-family home climbed 9.7 percent annually in April 2022. And the median price of a condo jumped 20%.
Despite the fact that home prices have increased significantly over the last few years, there are still a number of overpriced properties on the market. For example, the average rental rate for a condo in Miami is about $2400 per month.
