Miami has always been an exciting travel destination. Its beautiful beaches, endless resorts and high-end hotels, along with top-notch shopping and nightlife, have brought tourists here for years. Now, people have decided to make this their permanent home. Many are relocating by selling in other parts of the country and living in their vacation homes, retiring or just uprooting and leaving for sunny days and job opportunities.
Current Miami Market Conditions
- The median sales price of homes in Miami is at an all-time high.
- There has been an influx of households and employment in the Miami area.
- The housing supply has dropped considerably since last year.
Buying a House in Miami
Miami Home Prices
Miami median home value: $415,000
National average: $371,000
The Miami area has seen major growth in its home values. Prices have risen nearly $200,000 in the last 5 years. The market has seen an impressive increase of 25.8% year-over-year and is still on an upward trend. Compared to the national average, which increased 22.4%, homes in Miami are of higher value than most homes nationally and have seen a greater increase in less time. It looks like Miami is the place to be.
Miami Housing Supply
The housing supply in Miami has dropped 6.81 months since this time last year and now has an average supply of 3.1 months. This is a major drop in the number of homes available while still having a decent amount currently on the market. The diminishing housing supply indicates that people are coming here, and they are buying. For sellers this is great news — their homes are going quickly and for more than they ever imagined. For buyers, it’s a harder time to buy. They are paying more for every house and competing with other hopeful homebuyers. For investors, it’s a great time to get into this hot market. Home prices are continuing to rise as are rental prices.
The national housing supply stands at just 1.1 months — substantially less than in Miami. However, the national supply has dropped just 1.87 months year-over-year, while Miami has seen a much more significant drop in the same amount of time.
Buying a Rental Property in Miami
The rental market in places like Miami and surrounding cities always fluctuates as travelers come and go. However, there has been a major drop in the amount of housing recently and an increase in households. This potentially could make rentals harder to come by in the future as more people are moving here and living here year-round.
Miami Rental Rates
Miami median rental rate: $2,010
National average: $1,704
While home values have continued to increase in Miami, so have rental rates, which are up 7.2% year-over-year. The national average is up just 3%. In the previous 5 years, both Miami rentals and national rentals have seen an increase of about $300. While both continue to trend upward, Miami has seen a more recent spike. For investors, this means your investment property will rent out for higher than the national average, with a promising outlook for rent increases in the future.
Miami Rental Vacancies
Miami rental vacancy: 6.3%
National average: 6.8%
Rental vacancies in the Miami area are currently similar to the rental vacancies in much of the United States. Miami saw a major drop in vacancies in July 2020 when people began traveling again. It’s natural for a vacation area like this to see drops in vacancies at certain times of the year, usually during spring break in March and April. Because this area has a lot of ups and downs when it comes to its rental vacancies, real estate investors interested in purchasing a rental property here need to keep the favored vacation months in mind and plan accordingly. With the upward trend that rental prices are seeing, purchasing here sooner rather than later would be in investors’ best interest.
Miami Foreclosures
Miami foreclosure rate: 0.5%
National average: 0.3%
Like most of the country, foreclosures in Miami are at an all-time low. Both the Miami and national averages have seen a decrease in foreclosures of 0.1% year-over-year, bringing their foreclosure rates to almost nothing. For the Miami-area real estate market, this is great news because it helps to increase home values. For investors looking to get a great deal on a property, there just aren’t enough foreclosures to go around.
Miami Neighborhoods
Bayshore is Miami’s wealthiest neighborhood. With home prices averaging just less than $2 million, it is more expensive than 97.2% of neighborhoods nationally. This coastal suburb is made up of mid-sized single-family homes as well as apartment buildings and high rises. This is a community located right on the water, so there is a mixture of owner- and renter-occupied homes, and vacancies are common. A beautiful place to live or visit, this neighborhood is also diversified in cultures as well as languages and occupations.
Bay Heights is an urban neighborhood in Miami made up of small- to mid-sized apartments and single-family homes. Most of these homes were built in 2000 or later, and the community holds a record for the most studio, one- and two-bedroom apartments and single-family homes. Single, young professionals and college students occupy the majority of these smaller dwellings. The average home price in Bay Heights is $624,150, and the average rental is $2,976. The vacancy here is high at 31.8%, but 18.6% of homes here are only seasonally occupied.
Liberty Square is a much less expensive area of Miami. The average home price is $219,032, and rentals are around $1,229 per month. It is a densely populated neighborhood made up of studio to 4-bedroom apartment buildings and high-rises, with mostly renter-occupied real estate. With its walkability, low crime rates and less expensive rentals, this is a popular spot for college students. Occupations range from manufacturing and laborer jobs to fast-food restaurants. There are also some residents in professional or executive careers. The majority of workers take the bus to work, while riding a bike is also a great means of transportation.
Miami Economic Conditions
The past year hit the economy hard. High unemployment rates, minimal job opportunities and less travel have hurt vacation cities like Miami, but the outlook is getting better. Thousands of jobs have opened up, and travel is peaking.
Miami Unemployment
Miami unemployment rate: 6.4%
National average: 6.8%
Miami’s unemployment rates have been following pretty closely with the national average for the past 5 years, with a couple of recent surges. There was, of course, a spike during the pandemic last year, but it has since fallen 7%. Miami’s unemployment rate has seen a slight increase of 2.2% year-over-year, while nationally there has been a healthier decrease of 8.7%. Before the pandemic, Miami’s unemployment rate was at just 2.4%, and the city has every hope of getting back there one day. Miami has seen an increase of 255,800 jobs year-over-year, so the city is definitely on its way back to healthier levels for its economy.
Miami’s top Employers
The University of Miami is the top employer in Miami. It employs 12,818 residents and offers more than 180 undergraduate programs and majors. With a gorgeous campus and a wide variety of programs, students come here looking for a great education as well as smaller class sizes with a student-teacher ratio of 12-to-1. It takes a lot of workers to successfully run a university of this size.
The next largest employer in Miami is Baptist Health South Florida, which employs 11,000 workers. Baptist Health offers world-class healthcare in cancer, cardiovascular care, orthopedics and neurology. Education is also important. The health system offers certificate programs, residencies and fellowships to further serve the Miami area.
Another large employer is American Airlines, which has more than 11,000 employees. Multiple airports in Miami serve international and domestic flights. Being a travel hotspot, Miami International Airport is America’s 3rd-busiest airport.
Among other popular employers are those in the hospitality business. Carnival Cruise Lines and Royal Caribbean International, as well as a myriad of resorts and hotels, provide thousands of jobs in the Miami area.
The Bottom Line on the Miami Real Estate Market
The Miami real estate market is doing just fine after last year’s pandemic. Home and rental prices are increasing, and demand is high. Supply has decreased drastically, and more than 44,000 new households have arrived in the last year. With an increase in travel and job opportunities, Miami is proving to be a great place to live and invest in.