Welcome to our Miami Real Estate Market Predictions for Q4 2023. This Miami real estate forecast is not your standard report. We do not merely tell you how much prices have gone up, inventory has gone down, and it’s still the best market ever! This report is very specific and discusses concrete price points in specific geographical sub-markets. Different sub-markets react differently to macroeconomic influences and attract different buyers. Therefore, we analyze eachsub-market separately without generalizing the entire market.
Miami Real Estate Market Predictions | 10 Key Takeaways for Buyers and Sellers
1-A Balanced Market – Following extreme purchase behavior in 2021 and 2022 the Miami real estate market remains very robust. Months of Inventory (MOI) has not and will not balloon as some expect. Sellers still have the advantage in many cases. We divide Miami into 18 different neighborhoods with five different price points for each neighborhood. This means there is a variable of 90 possible outcomes. Within these 90 submarkets, only a small handful (less than 10%) show signs of excess inventory. Read the individual reports to see which ones, or visit our market statistics page. Miami is averaging 9 MOI across most major markets.
2-Continued Migration with Low Attrition Rate – Continued Migration is still very real, and Florida’s population will grow by 2% over 2023. These wealth migrations are likely to continue as long as our feeder states are experiencing socioeconomic issues. In addition, Miami’s attrition rate is lower than ever before. Miami’s population grew by 2% in 2022. Private Schools admissions are up 50%.
3-Lack of Quality Inventory – We see the same active buyers as in 2022, although the difference is that the availability of quality products* is greatly diminished. There is still a demand for quality products, but the inventory is limited, leading to slower sales and increasing inventory levels. Buyers are no longer desperate to buy a property and to compromise during their search. These days they prefer to wait rather than settle for a badly finished or dated property. * With quality products, I mean newer condos (post-2017), prime luxury condos, newer homes, or custom-built, superbly finished homes). Newer homes average just 11% of total sales and in many areas, just 7% of inventory.
4-Stable Price Levels – We do not expect a price drop, however, because the inventory supply is still low in most markets. Although inventory has increased, we are still dealing with a manageable amount. Moreover, there is a lot of overpriced or low-quality product on the market, which inflates inventory levels and has little to do with the overall market performance. Quality-product still trades very fast. Although we expect more stability concerning price levels, there is still potential for the market to go up in some areas. This depends on the product type, area, and availability of new inventory. Prices are still up 3% in the last six months.
5-Affordability is a Growing Concern – Affordability is a growing concern, with entry-level home prices starting at around $2 million in prime residential markets and new construction homes beginning at $6 million. The low inventory levels in these markets do not allow prices to adjust any time soon. The condo market, especially in the beach areas, is dominated by ultra-luxury condos, with limited options in the $3 million to $6 million range. The entry price for Single Family Homes is up 70% from 2021. Condos are up 26%.
6-Expanding inventory across a few Condo Market Sub Sectors – Although inventory remains low almost systematically across all markets, there are a couple of condo Sectors wherein inventory is beyond 25 months. Investigation reveals that specific property types are becoming harder to move. Older Condos (pre-2010) with ballooning HOA Fees and original units are stagnating on the market as more and more inventory enters. Renovation costs have increased substantially, and this product is increasingly seen as a ‘headache’. Inventory, for $3-$5m Condos in Brickell and Sunny Isles hits 30 months.
7-An expected correction of the asking price per SqFt for huge older homes in many markets. Once again, with rising renovation costs, older homes become harder to renovate and as expensive as building a new home. Older Pinecrest homes stay 80% longer on the market and sell at 5% less than last year.
8-Record Breaking Sales prices per Sqft for Ultra Luxury Homes and Condos will continue through out 2023. As migration from the high-tax states continues, the values of Miamiproperties continue to resemble property values in Manhattan and LA. The ‘first choice’ desire for new luxury homes and Condos from wealthy relocating professionals from these states, combined with the severely limited supply, will potentially push prices EVEN higher. 2022's top 5 home sales were $4,000+ per SqFt while the top 5 condo sales $5,000+ per SqFt.
9-New Condo Construction will remain the focal point of luxury condo buyers. As the provision of newer products focuses on larger units (3 bedrooms+), the increase of primary luxury condo buyers marks a systematic move away from cheaper condo ‘investor class product’. This hopefully ensures a more robust long-term market. New Condo Construction product shifts the high price per sqft bar into un-chartered territory over $5,000 per sqft and, in some cases, for penthouse products over $6,000 per sqft. 25 Miami new construction Condos. Avg. $2,000 per SF+
10-Land will continue to appreciate. As long as the ceiling end of our housing market remains high and the desire for new homes continues (we don’t see buyers not preferring new homes). The appeal of building your own home will remain, as will the desire for land to build it on! The top end of our housing market saw a systematic jump in sales price per SqFt to new record prices, so the land value will continue to increase. We work with many investors and home buyers to identify off-market land deals. Example: Miami Beach waterfront reached over $1,000 per sqft. Coconut Grove / Gables dry lots hit $185 per sqft.
Miami Real Estate Market Predictions per Neighborhood
Coral Gables real estate forecast
Coral Gables’ primary nature, low inventory levels, and high demand by continued relocating families ensures a stable if not small positive appreciation through 2023.
Coconut Grove real estate forecast
The primary characteristic of Coconut Grove, combined with low supply and high demand due to ongoing family relocations, limited space, and the perfect location, will likely lead to a stable and even slight increase in property values in 2023.
Pinecrest real estate forecast
Pinecrest is a mixed bag! Newer homes and North Pinecrest homes remain in short supply and popular as they provide a very real alternative to the Gables but more oversized lots. The older homes and South Pinecrest homes have seen a slow down in sales and will we predict to continue to do so through 2023. Fortunately, its great private schools keep this neighborhood from too great a drop.
South Miami real estate forecast
The South Miami home values are better (for buyers) than those neighboring: Coral Gables or Pinecrest, but the curb appeal is equal, homes styles are equal and walkability is better! I don’t foresee a future where prices will drop in this market. Newly constructed and remodeled homes will likely continue to command high prices, and records will probably keep being broken.
Miami real estate forecast for the Urban Core (Brickell, Downtown and Edgewater)
Brickell and the Urban core are traditionally investor-class markets. On average, 80% of the market is destined for the rental market. As long as rents remain stable and the underlying assets keeps it value, the market will remain stable. We do see a ballooning inventory in several market sections, so we could anticipate some price corrections.
Sunny Isles Real Estate Forecast
The Sunny Isles condo market is one of the two markets in which we see the highest uptick in inventory– the other is Brickell. We believe this increase in inventory is caused by a growing divide between overzealous sellers asking for ‘peak’ prices against a backdrop of the now cautious buyer. The market is one of Miami’s most volatile and elastic markets, as it is one of the most investor-driven and second homeowner markets in Miami. Some condos continue to do well, while others are showing clear signs of fracturing.