Miami’s housing market may be entering a sustained period, not a drop or growth.
Miami’s real estate market has been one of the fastest growing and expensive in the country. It is the most expensive place to live in Florida. But that trend might be changing soon.
Miami is now the eighth priciest major city to rent a one-bedroom apartment in, according to a Zumper report published in April. The median rent price for a one-bedroom unit in the bustling Florida city is $1,900.
Other top 10 cities include New York; Boston; Oakland, California; San Jose and Washington, D.C. Four of the top 10 most expensive cities are in California. San Francisco leads the pack with a median rental price of $3,590. Miami’s median rent rate is only $70 below seventh place, which is currently held by Los Angeles.
Miami’s $1,900 median rent rate jumped from $1,840 in February, according to Miami Curbed article. That is an 8.6 percent increase. Meanwhile, two-bedroom median rent prices rose just $40 from $2,600 to $2,640.
Miami is also included in realtor.com’s “The Boom Towns” list. It comes in at number four. The Boom Town list is based on projected five-year household growth. Miami’s, specifically downtown Miami’s, projected five-year household growth is 14.9 percent. Power Ranch in Gilbert, Arizona, comes in at first; Historical Cultural Center in Los Angeles, California, comes in second; and downtown Dallas, Texas, comes in third.
While Miami may have the highest prices in Florida, it has one of the smaller price growth rates. Leading the state is Orlando with an 8.9 percent rent growth rate. Miami has the fourth lowest in the state with a 2.3 percent rent growth rate, according to a Miami Curbed article. Miami is far from the bottom three cities of Fort Lauderdale, Tallahassee and Pembroke Pines, though. Tallahassee and Pembroke Pines both have negative rent growth rates of -2.3 percent and -3.1 percent, respectively. Fort Lauderdale has a 0.7 percent growth rate.
With all this growth, it seems like Miami is unstoppable. But, in fact, the southern Florida city is slowing down. The Real Deal, which reports on South Florida real estate news, said that Miamians should not expect the city to break any real estate records in the year 2016.
The Real Deal reports Miami’s coastal property sales took a hit last year. Only 1,876 single-family homes were traded in the fourth quarter of 2015. A number that is 14 percent less compared to the 2014 fourth quarter rates. Only 2,225 condos were sold, a 16.1 percent decrease from 14 percent.
The Miami Beach area is taking an even bigger hit. The number of condos and single-family homes listed for sale on the market were up from previous years. In 2015, there were 4,512 units listed for sale; a 29 percent increased from 2014’s 3,504 units. And fewer units are being bought. According to the information from real estate experts, these numbers should not cause a panic. They could just be the sign of the market attempting to correct itself after the recent boom.
The price of single-family homes shot up comparatively. The average closing price for those properties was $3.35 million. That is a 67.3 percent increased from 2014. But the increased prices are also driving down sales. Only 80 percent of Miami Beach homes were sold during the fourth quarter of 2015, 28 percent fewer than the same period in 2014.
A decrease in price may help some Miami residents. For those who can’t afford Miami Beach condos or coastal units, the growth of median home prices is outpacing the wage growth in the city, according to a Miami Herald article. Miami’s standing on the lists of top 10 priciest cities and first 5 cities with the highest projected five-year growth helps out real estate moguls, but not the common household.
Wages have only grown by a mere 5 percent since 2005 while median home prices grew 9 percent. While Miami’s prices are still lower and affordable to many people compared to previous prices before the 2008 recession, this trend seems only to be getting worse for households struggling to afford homes now. The recent boom in popularity and price can continue growing and possibly push out those families.
Miami’s market seems to be balancing itself out after its recent boom. While there is no future recession predicted for the future, the same growth seen in the past couple of years. It is best to play it by ear in the 2016 year.