This summer’s study of Miami-Dade Counties sizzling real estate market proves that despite the negative variables, to buyers and renters, Miami is still the place to be. Mid-Market properties ranging from $200,000 to $1 Million provide a more comprehensive overview of the state of the market and real estate professionals are optimistic in this buyer’s market. Overall, Miami-Dade continues to see decent gains in property values, thanks to broad demand for single-family homes in the middle of the market and the completion of nearly $6 billion in new construction. There's a lot of inventory and buyers have the pick of the litter. Agents are narrowing down their searches based on the key variables that buyers are looking at including financing, weather insurance, and location, location, location.
The percentage of cash buyers financing homes has dwindled down and mortgage buyers have taken the lead. Professionals are seeing a more traditional model of real people buying, not just cash investors from foreign countries. Banks are more confident in the real estate market and are offering more options. Interest rates are inching up making fence-sitters who might be waiting to buy a home jump now before they get any higher. The housing affordability for renters, however, is getting worse. More than ½ the county’s families spend more than 30% of their gross income on rent. Miami-Dade has the 3rd worst rent to income ratio in the U.S.
Another factor affecting buying decisions is windstorm insurance. After last year’s Hurricane Irma scare and the growing concern over South Florida’s vulnerability to sea level rise, windstorm insurance rates have held sway on home buyers’ decisions. Folks are used to property taxes but windstorm insurance matters more than anything else. These financial setbacks are what makes renting a condo seem more appealing. Nearly 4,800 new rental apartments were completed from 2014 to 2018 and another 5,062 are currently under construction making the supply outweigh the demand. Overbuilding has made the supply of apartments to go through the roof and as the cranes come down, rents are going to come down too. There is currently a 32-month supply of condos in downtown Miami alone, so the only way to move a condo in this market is to lower your price.
With any real estate purchase, the location is key. It may even be one of the most important variables. Traffic congestion in downtown Miami is brutal, it’s everywhere and it’s changing the city. The perpetual gridlock may be one of the biggest factors to the booming population in downtown Miami. This can be a selling point too for those that want to ditch their cars altogether.