The Miami real estate market is one of the most promising real estate investments you can probably see in South Florida. Miami is one of the most popular cities in Southeast Florida. Also known as The Magic City, Miami gained a reputation for great weather, white-sandy beaches, eclectic culture, and good food that you will not find anywhere else in the United States.
Because of the many incredible things in this city, you will see that Miami has a promising real estate investment opportunity. Miami has a hot real estate market because of its highly desirable location for both residential and commercial purposes. This hot real estate market is all thanks to the impressively growing economy of this city. And that is why many investors, buyers, and sellers are attracted to this Florida city.
If you are interested in investing in Miami real estate, you might want to think about learning more about this city. You need to know about its population and growth, the housing and renting market conditions, cost of living, real estate market history, and many more. That way, you will get a clear image of whether or not Miami is the perfect place to put your money on.
Aside from knowing whether or not Miami is a brilliant place to invest, you should also know if now is a good time to invest there. Other than that, you should make a plan by listening to the market conditions today. And to help you do all that, we will tell you everything you need to know about the latest Miami real estate news.
Miami Population and Growth
The first factor you need to consider before investing in real estate is the population and growth in the city. Florida has quite a brilliant population. You can expect the population of South Florida to increase by as many as 26 million people by the time we reach 2030. South Florida will be the most populated area in Florida based on data from the Florida Chamber of Commerce.
The rise of population in Miami and South Florida, in general, is thanks to the influx of people migrating from high-tax urban areas. Many people who own businesses would prefer to move to Miami because of the low-tax benefit that they will get. This low-tax benefit might even be the main reason behind the impressive population growth in all of South Florida.
The population of South Florida today is approximately 6.1 million. This number is predicted to increase by over 12% each over the next thirty years. Based on research done by the University of Florida, the population of Florida will reach 6.9 million in the next ten years and 7.6 million by the time we reach 2045. Over the last decade, South Florida’s population has increased by as much as 10.3%.
Miami and South Florida Housing Market
South Florida has quite a hot real estate market, especially if you look at Miami. The sales of single-family homes in South Florida are thriving. You will even see a 142% surge in total home sales in Miami in 2022 compared to 2021. As reported by CBS Miami, many investors are icing out the homebuyers who cannot compete in this hot housing market.
The Miami real estate market is still very hot today. The median home value of houses in Miami is around $463,405, which is a very high number compared to 2012 when this city is trying to survive the recession. In 2012, the median home value in Miami was somewhere around $201,000. Since that year, the housing prices in this city have increased by almost 130.5%.
Over the last year, the median home value in Miami has increased by as much as 20.1%. Some factors that affect the home value in Miami include high demand, low supply, and low-interest rates. The Government decided to lower borrowing costs for homebuyers. They do this for homebuyers who have a larger savings account, encouraging them to spend their money. And not long after that, the demand for housing becomes a competition.
Houses in Miami only have 18.1 weeks of supply. Miami has turned into a mostly seller’s market, with homeowners increasing the prices of homes accordingly. The lack of supply in Miami caused an increased home value. This increase in home values is predicted to reach approximately 16.2% over the next year. That is why the housing market in Miami today is very impressive, much like the South Florida real estate market.
Miami and South Florida Renting Market
As an investor, you will be glad to know that the renting market in Miami and South Florida is very attractive right now. South Florida is an area with the 3rd fastest-growing renting market in the United States. The average rents in this area are around 27% each year from August 2020 to August 2021.
Based on a report by WPTV, the reopening of local economies is one of the reasons that enhance the renting market in this city. The increase in renting prices since that reopening has even made up for a lost time, which is very impressive.
Despite the strong renting market in Miami and South Florida, remote investors of real estate might still be able to find good deals on rental properties. The latest Miami beach real estate news stated that a couple of sellers accept credits and even give out discounts, especially for properties in need of renovations. This should encourage you to find rental properties in the city.
According to a real estate expert, the rental increase in Miami even reaches $1,000 a month at times. More people are relocating from the Northeast to the Southeast part of Florida, including Miami. That is one of the reasons why the demand for rental properties is increasing each day.
According to data from Zumper, the median rent value of a 3-bedroom house in Miami is around $4,000 per month with an annual rent increase of 29%. Many households in Miami are occupied by renters, with renters occupying 33% of all of the households in this city.
The most affordable neighborhoods for renters in Miami include Indian Spring, Canongate, and Villages of Oriole. These neighborhoods have a rent price that ranges between $1,600 to $1,750 per month. On the other hand, the most expensive neighborhoods for renters are Addison Reserve, Wynwood, and Park West. Renting in those neighborhoods can cause you around $9,800 or more per month.
Miami Cost of Living
The overall cost of living in Miami is quite expensive compared to other areas in the United States. Based on the cost of living index by bestplaces.net, the overall cost of living index of Miami reaches 123.1. This index is based on the cost of living index in the United States, which is 100. And because the cost of living index in Miami is more than 100, it means that living in Miami is more expensive than the average cost of living in the United States.
The cost of living in Miami is more expensive in almost every aspect of life. The cost of living is more expensive than in the United States on average when it comes to groceries, housing, and transportation. The cost of living for health and utilities is relatively the same as the cost of living for those aspects in the United States. That is why the Miami real estate market is very hot.
Miami Market History
Another thing you need to consider before investing in Miami real estate is the market history. Analyzing the market history changes when it comes to home prices and affordability will help you forecast the housing demand in the future. You can use the Freddie Mac House Price Index and the housing affordability report by Kiplinger to help you get a good image.
Based on a recent report by Freddie, you will see that the house price index in South Florida is 220.25 in April 2017. This number rises to 378.46 in April 2022, with a one-year change in home prices of 28.2%. The change in home prices is very impressive, which is around 71.8% in five years.
After comparing home prices through the years, you should also know the affordability report by Kiplinger. This report compares the median income that you need to purchase a home with the median home prices in South Florida. The result is an affordability index from 1 to 10, with 1 representing an area that is very not affordable and 10 representing an area that is the most affordable.
Based on the Kiplinger report, South Florida has an affordability index of 8 out of 10. This means that South Florida is a very affordable place in the United States to buy a home. That is why Miami might be one of the best places for you to invest, especially considering the growing South Florida real estate today.
Miami Real Estate Market Forecast
Now that you know the market history of Miami and South Florida, let’s get right into the market forecast for the future. Because Miami real estate has been keeping pace with the national industry, it is safe to say that the real estate market in this city will continue to thrive. However, the Coronavirus pandemic might affect the market in this city, as with other cities in the United States.
While it is still very early to say how exactly the Miami market will look like shortly, you might be able to interpret the impact of the pandemic in a very meaningful way. Without further ado, here is what the Miami real estate market might look like soon.
- Expensive houses in Miami. Some experts predict that buying a house in Miami will be more expensive in the future. Since the median home price in this city increased by 20.1% over the last year, you can predict the price to continue increasing over the next few years. Because of more competition, lower interest rates, bigger savings accounts, and less inventory, it will be wise to say that the average home price in Miami will be more expensive in the future.
- Foreclosures in Miami will increase. The next thing you can expect is an increase in foreclosures in the city. In 2022, foreclosures in Miami are lower than in 2021. The government has made efforts to prevent lenders from initiating the foreclosure process. However, the moratoriums of this effort are going to expire soon, which means there will be more foreclosures soon.
- Rental properties will be a good investment opportunity. As an investor, the best thing for you to do is to invest in rental properties. Rents in Miami have increased at twice the rate of the increase of home values in this city. And rents will continue to increase along with home prices in Miami. That is why you will be able to earn great profit from rental properties.
Pros and Cons of Living in Miami
After learning all about the South Florida housing market, you should know the pros and cons of living in Miami. Here are the advantages you will experience if you are living in this city.
- Many fun things to do. Miami is a very lively city. You will be able to find a lot of fun things to do, including visiting the beach and a lively club scene. You will also be able to go to museums, festivals, art shows, theme parks, and so many more.
- No state income tax. Miami also has no state income tax, which is why many businessmen prefer to move their businesses to this city.
Some disadvantages of living in Miami include:
- Relatively high cost of living. One big disadvantage of living in Miami is its high cost of living. You need to have a stable high income if you want to enjoy your life in this city.
Miami is a very lively city with a lot of opportunities for investors. With its growing population, hot real estate market, and strong rental market, Miami is a great place for you to invest. And that is what you need to know about the Miami real estate market.