Spring is right around the corner, and the temperatures aren’t the only thing heating up. The Miami housing market is hot and getting hotter. As demand for homes is soaring, the supply of homes for sale is shrinking, creating an increasingly competitive and dynamic environment for prospective buyers.
Inventory of single-family homes was down more than 40% year over year last December according to a report from the Miami Association of Realtors. When you pair this with the fact that Miami-Dade County total home sales jumped 23.3% year over year, you can start to see that there is a clear mismatch in supply and demand within the Miami housing market.
In fact, this is the story in Miami, in Florida as a whole, and in many other states throughout the US. There are currently fewer houses for sale and more buyers wanting to purchase them. Because of this, each home that enters the market is likely to be considered by more people, which ultimately leads to more offers being submitted for each home. This makes for a really competitive market, giving the sellers leeway to choose among the best offers. It can often lead to homes selling quickly and above their listing prices.
As Danielle Hale, realtor.com’s chief economist puts it, “Those thinking of getting into the market this spring should brace themselves for a competitive season, especially in the market for existing homes.”
THE MIAMI HOUSING MARKET IS HOT, HOT, HOT!
Just take a look at these stats from the Miami Association of Realtors 2020 report
- Miami luxury home sales surged 108.5% year-over-year in December 2020
- Miami-Dade County total home sales were up 23.3% year-over-year at the end of 2020
- Miami single-family home sales posted double-digit, year-over-year increases for 5 consecutive months
- Miami existing condos posted transaction gains for 4 straight months
- 109 Consecutive Months of Price Appreciation in Miami, a streak of more than 9 years
WHY ARE WE SEEING THESE POSITIVE TRENDS IN THE MIAMI HOUSING MARKET?
There are several factors creating the perfect storm for Miami real estate.
- Record-low Interest Rates. Mortgage interest rates are at an all-time low and are currently widely available below 3%! This can amount to thousands of dollars in savings over the lifetime of the loan.
- Work-from home and remote-learning policies pumping demand. These lifestyle shifts have left many people spending much more time at home. As a result, people want to love where they live and are looking for their dream homes. We are seeing a trend of people using this opportunity to move somewhere where they can really enjoy their lives, such as sunny Miami Beach.
- Florida Tax Benefits. People are leaving more heavily tax-burdened Northeastern states to Florida where there is no state income tax. See our take on why so many people are moving from New York to Florida.
- Miami is an International Bargain. Miami is an epicenter of global activity, and Miami real estate is still a bargain compared to other global cities. According to Knight Frank’s 2019 The Wealth Report, In Miami, $1 million can net homebuyers 93 square meters of prime property, which is significantly higher than some other major international cities such as Monaco (16 square meters), Hong Kong (22), New York (31), and Los Angeles (36).
- Investment potential. The Florida real estate market is showing no signs of slowing down, and real estate is an attractive, more stable asset in what can at times be a volatile economy.
The Miami housing market is strong right now, and it will only get stronger as we head into Spring. The longer you wait, the more likely competition and prices are to increase. Miami’s 9-year streak of monthly average price increases is a testament to that fact. Now is the perfect time to find a home that you love in Miami. If you are interested in learning more, reach out, we would love to talk!