The Miami real estate market is nothing short of impressive. Located on the Southeast tip of the Florida peninsula, The Magic City has developed a reputation for pristine white-sand beaches, great weather, even better food, and eclectic culture that can’t be found anywhere else. However, it is worth noting that such regional offerings have given way to one of the hottest real estate markets in the country.
The Miami housing market is the primary beneficiary of a highly desirable location for commercial and residential aspirations. Due, in large part, to a strengthening economy and growing confidence in the housing sector, local inventory has become a commodity for anyone with their finger on the pulse of real estate investing. There are many reasons for buyers, sellers, and investors to be interested in the Florida city, which begs the question: Is Miami real estate a good investment? Better yet, is it a good time to buy real estate in Miami?
Foreign and domestic real estate investors, in particular, have found that Florida’s most famous city can serve as a lucrative backdrop for savvy entrepreneurs. However, it’s not enough to invest in Miami real estate without a plan; you need to listen to what the market is saying in the wake of the pandemic and translate each fundamental indicator into a viable action plan.
Miami real estate news has kept pace with the national industry. However, in light of the Coronavirus, markets across the country may start to act independently. While it is too early to tell exactly what real estate in Miami will look like for the foreseeable future, it is possible to interpret the pandemic’s impact in a meaningful way. Here is a look at the Miami real estate market trends which are most likely going to have a lasting impact:
- Buying a house in Miami will get more expensive: The median house price in Miami has increased 20.1% over the last year. The increase was directly correlated to more competition, less inventory, lower interest rates and bigger savings accounts. That said, there’s nothing to suggest the same indicators won’t drive prices higher over the next 12 months. Inventory isn’t expected to ease anytime soon and more people will want to buy before interest rates jump, which could lead to an additional 16.2% increase in local home values.
- Miami foreclosures will increase: Foreclosures in Miami are lower at this point of the year than they were last year. If for nothing else, government aid and moratoriums prevented lenders from starting the foreclosure process on delinquent owners. However, the moratoriums are set to expire and owners will be expected to come current on payments. A select few will keep up with their obligations, but a large majority will most likely fall into foreclosure. It’s too soon to tell how many will remain delinquent, but an influx of foreclosures is expected.
- Rental properties will be the most viable investment strategy: Home price appreciation has detracted from profit margins, effectively making rehabs less attractive to investors. However, the same indicators that lowered profit margins on flips made rental properties more attractive. In particular, rents have increased at nearly twice the rate of home values in Miami. Perhaps even more importantly, rents should continue to increase as long as home prices do. With more people being relegated to the renter pool, landlords stand to benefit immensely.