South Florida’s Hot Real Estate Market: What Draws Homebuyers Despite High Prices

DEBARYLIFE – After a dip in home sales since December, wealthy purchasers returned to South Florida in April.

The most recent monthly housing data from the Miami Association of Realtors shows that 2,342 homes were sold in Miami-Dade County, a 5.4% increase from April 2023. Even more activity was observed in Broward, with 2,538 home deals, an increase of 6.1%.

Even national trends are defied by the South Florida real estate market. The National Association of Realtors reports that the number of single-family homes and condos decreased by over 2% across the country.

For the first time this year, South Florida’s sluggish housing market took off in April. The number of year-over-year home sales increased by just 1% in January and February and dropped by double digits in March, which real estate analysts attributed to rising interest rates and economic worries.

As they snap up some of the most expensive properties available, today’s homebuyers don’t seem to be concerned about historically high sales prices; in fact, in certain areas of Coral Gables and Miami Beach, property values have risen to all-time highs.

In Miami-Dade County, the median sales price of single-family houses hit a record high of $654,000, above the previous high of $650,000 set in February and March. Condo prices average $444,000.

There was comparable activity in Broward County, where the median sales price for condos was $282,500 and the highest price for a home this year was $635,000.

If prices continue to rise and there is little inventory, the market is one for sellers. Other markets are beginning to shift from being sellers’ markets to being buyers’ markets. “In Miami, we’re not there yet,” stated Jason Damm, a University of Miami assistant professor of professional practice in finance. “That simply indicates a high level of market demand.”

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Damm continued, “Billionaires like Jeff Bezos, the founder of Amazon, and Ken Griffin, the CEO of Citadel, have been the main drivers of demand, with others in their industry following their example and relocating to South Florida.”

Miami and Broward County, Florida, have a scarcity of single-family homes and condominiums compared to demand.

Six to nine months of inventory is the range that defines a balanced market; any less would help buyers in negotiations, and any more would favor sellers. Miami-Dade now has 8.3 months of condos and 4.4 months of houses. In Broward, there are 3.4 months of houses and 7.4 months of condominiums.

The good news for purchasers is that there is still more inventory now than there was a year ago. There were 3.3 months’ worth of houses and 4.9 months’ worth of condos in Miami-Dade as of April 2023. There were 2.5 months of houses and 3.3 months of condominiums in Broward.

The inventory is beginning to increase. The proprietor of the real estate and economic research company Jack McCabe Expert Services, located in Deerfield Beach, Jack McCabe, stated that typically when you see that, you’ll see some trailing pricing.

McCabe stated, “You still have affluent buyers, limited supply, and strong demand.” If they come from a place where five or six million is the going rate, it doesn’t concern them to pay three or four million. Sunshine and these mansions make everything worthwhile.

Almost half of those who purchase do so with cash. Broward had 41.5% of transactions finish with dinero, while Miami-Dade saw 40.3%. The two numbers stood in stark contrast to the 28% national average.

Trust in the real estate market in South Florida

After working with Terra for over ten years, real estate developer Ellen Buckley felt secure about starting her own company in January 2023 because she could see the resiliency and steady demand for South Florida houses.

Prospera Real Estate founder and CEO Buckley noted that she observed a new degree of wealth and interest in Miami in addition to her desire to run her own company.

“I’ve never seen this kind of commitment to South Florida before the pandemic,” Buckley remarked. “Students are attending Columbia College with the goal of finding employment in Miami.” Regarding the desire to live and work here, it has reversed.

Prospera Real Estate is currently working on a few projects in South Florida, mostly in North Miami, Coconut Grove, and Miami Beach. Buckley plans to take use of the Live Local Act, a piece of Florida legislation that offers tax breaks and cash to encourage developers to create workforce and affordable housing communities, in addition to building for opulent high-rises.

Buckley stated, “We need to feed every level in order to have a vibrant economy.”