The Miami real estate market has been in a state of flux for several years. The last quarter of 2022 saw sales declining and housing inventory increasing as a result of interest rate hikes and more people being priced out of the homebuying arena. Whether you’re moving to Miami for the first time or you’re a Miami resident ready to go from tenant to homeowner, it’s a good idea to take a hard look at the Miami real estate market as it unfolds so you can make the right moves in 2023 and beyond.
How Active Is the Miami Real Estate Market Right Now?
The Miami real estate market, similar to other major metro markets, is seeing a slow down in market activity and is inching closer to a more balanced market as inventory levels increase steadily.
In January 2022, Miami had only 1.8 months of single family home inventory. As of November 2022, Miami has 4 months of single family home inventory, a 122% increase.
Traditionally, a balanced market is characterized as having 5.5 months supply of housing inventory. Below 5.5 is considered a seller’s market and above 5.5 is considered a buyer’s market. Which means Miami’s single family home market is still considered a seller’s market at this time.
The Miami market is also seeing home transactions moving at a slower pace compared to earlier this year. Median time to contract increased from 15 days to 31 days from June 2022 to November 2022.
At the time of writing, December stats have yet to be released but we anticipate similar trends for December as well, especially when you add in the seasonal slowdown brought on by the holidays.
A Look at Recent Selling Trends in Miami
According to Miami Realtors Association, closed sales for November saw a dramatic year over year decrease of 38%, going from 1,168 to 718 closed sales. This also fell below pre-pandemic levels, considering that November 2019 saw closer to 972 closed sales.
In addition, the median home sale price for Miami single-family homes also has declined from a previous high of $570,000 in June 2022 to $550,000 as of November 2022. Although year over year, we saw an increase of 9.4%.
It appears that November market activity was impacted significantly by the Federal Reserves decision to raise interest rates towards the end of 2022, resulting in mortgages rates reaching a peak of 7.1% in early November.
At the time of writing, interest rates have decreased slightly. However, the Feds have indicated that another rate increase may be on the horizon for 2023.
It’s difficult to say with certainty how this will impact the Miami real estate market as a whole.
If rates increase, mortgages will continue to be unaffordable for many home buyers and force them to the sidelines. Which could result in real estate sales activity to continue on this declining trend.
However, Miami is known to be a very resilient market and continues to have some insulation from national trends due to many factors such as steady interest from foreign buyers and high net-worth professionals.