Miami has become one of the most dynamic real estate markets in the country over the past several years. The 2020 pandemic helped increase migration from New York City. But it’s more than Florida’s favorable tax policies and great weather that have people moving southward and looking at Miami real estate. What is happening with Miami prices and what do real estate investors need to know about Magic City in 2024.
Miami Rising: Wall Street South And The Invasion Of The Billionaires
The city is increasingly becoming a draw for the financial elite led by billionaire Ken Griffin, who is building a $1 billion headquarters for Citadel in Miami. Both Palm Beach and Miami are vying for the title of Wall Street South as many firms have decided to set up shop in South Florida. In addition to financial firms, Miami is gaining more notice from tech companies. It doesn’t have the draw of Silicon Valley or Austin, but it is starting to attract more venture capital and is becoming a fintech hub.
At the same time, many billionaires have migrated to the area. Jeff Bezos and Larry Ellison have spent millions on mansions in Florida. Sports celebrities like David Beckham and Tom Brady have also been drawn to the area. Real estate investor Grant Cardone has allocated $500 million to the South Florida region.
While the billionaires attract headlines, it is the opportunities that are attracting people to the Miami area. The city is in the top 10 of large cities experiencing substantial growth. In Miami, the unemployment rate for August was 3.1%, the lowest in the state.
The influx of companies to the Miami area has also boosted the construction of new office towers. Miami has an above-average level of office supply being built. Deal volume has been robust. Commercial Edge reported that 29 properties were sold for $588 million through August, putting Miami in third place among large markets. Miami office vacancy is high but still lower than the national average.
What Does It All Mean For Miami Real Estate?
As of August, the median sale price in Miami was $600,000, up 8.6% year over year. The median sales price for Miami-Dade County was $536,400, up 2.2%.
There is trouble brewing for older condominium buildings in Miami. Investors and potential homeowners will need to be aware of new laws in Florida in the wake of the Surfside building collapse. The new legislation requires inspections for buildings that are over 30 years old. It also requires new rules for how condominium associations reserve funds. There have been some stories of condos assessing large fees for building repairs that may have been put off for many years.
The Miami Herald reported in September that condos in Miami-Dade County were at a 9.5-month supply. That’s the highest since 2021 and a sign that potential buyers may be aware of the new rules and are more hesitant to buy until they know how things may shake out. So far, this hasn’t caused condo prices to fall dramatically, but this may concern some lower-priced and older condominium buildings. One potential trend to watch is an increase in condo buyouts. This happens when the bulk of owners in a building decide to sell to a developer.
Things appear to be very strong at the high end of the condo market. The Miami Association of Realtors found that sales of condos over $1 million have been up over 122% since August 2019. Miami single-family prices have risen for nearly 13 years. According to data from CoreLogic, Miami leads the nation in price appreciation. Because of this rapid price acceleration, there may be some concerns that Miami is in a real estate bubble.
Florida has been the top state for foreign buyers for the last 15 years. The 2023 Florida Realtors' annual Profile of International Residential Real Estate Activity in Florida showed that 47% of international sales occur in the South Florida area, including Miami-Dade County. Miami attracts much foreign interest from Colombia, China, Canada, India and other countries. This pipeline of active buyers is another positive indicator for the future of Miami’s residential real estate.
The Miami market faces several challenges, including a high potential for flooding and difficulty obtaining home insurance, as many insurers have left the market. However, the ongoing demand for Miami real estate and the city's growth should help keep real estate prices steady. Real estate analyst Ana Bozovic believes that because much of the existing market has risen based on cash buyers, it will remain resilient.