Miami is quickly becoming one of the global elites. As one of the world’s hottest real estate markets, Miami now finds its name in the same conversation as London, Paris, and New York. Whether it’s the fashion, music, sports, or art, the international public has taken a keen interest in Miami real estate. According to Christie’s International Real Estate, the world’s largest luxury real estate brokerage network, Miami has been one of the top 10 global residential housing markets for the last two years. So what sets a condo in South Beach apart from a similar property in, say, London? Price. Property values in Miami look reasonable compared to those in the world’s most high profile markets. It’s estimated that a buyer could purchase six condos in downtown Miami for the price of one flat in London!
Median Prices of Miami-Dade
Although you may think that Miami real estate is out of your price range, you might be surprised. Almost 70 percent of condos, and 61 percent of single-family homes, are selling for under $300,000. Those prices are comparable to similar metropolitan areas such as Charlotte and Atlanta. Single-family homes and condos saw their values crushed during the financial crisis, in some cases losing over half their value. Post-crisis the Miami-Dade real estate market has seen a substantial uptick in price. Over the last 3 ½ years single-family home prices have seen an increase of 55 percent to $251,000, while condominium prices have soared 93 percent to a median price of $189,000.
Although prices for both single-family homes and condos are higher than they’ve been in the last six years, they’re still off 2007 highs by 29 and 34 percent respectively. These numbers lend credence to the idea that Miami real estate is still relatively cheap compared to some of its other high-end competitors.
Real estate inventory is another indicator of the Miami housing market recovery and desirability. This number, found by dividing the number of units in inventory by the average number of current sales per month, represents the number of months of inventory remaining to be sold if no new properties were listed on the market. According to the Multiple Listing Service, Miami-Dade had a single-family home inventory of slightly more than four months for the three months ending July 2014, while condominium inventory registered marginally higher at about seven months over the same period. Both numbers lie within the industry optimal range of six to nine months.
As the year progresses we will see what role macroeconomic factors play in the South Florida real estate market. Consumer confidence, as reported by the University of Michigan, hit a seven-year high in August, likely brought on by accelerated job creation and marginally rising wages. This increased confidence may translate into the consumer’s increased willingness to purchase a home. Similarly, with credit markets beginning to loosen, and a Fed rate hike likely in 2015, the consumer who’s been waiting on the sidelines for that new mortgage, may just see the perfect window of opportunity in the latter part of 2014.
This environment of heightened consumer confidence and low rates may create the perfect storm to keep the momentum in the Miami market moving forward.