Home prices are setting new records across South Florida. According to Miami Realtors, Miami-Dade County single-family home sales set an all-time annual record in 2015, and existing properties reached the third highest sales in history. It’s been a dynamite year for real estate, and in 2016 prices continue to rise across all three South Florida counties. Miami is now the third most expensive city in the US. South Florida is a hot market. Sales remain the strongest in the top tier as well as bottom price ranges.
South Florida is one of the fastest rising markets in the country with a Standard & Poor index of 8%. Driving prices up is a shortage of inventory coupled with demand. While South Florida is now seeing the bidding wars of San Francisco or New York, it is one of the most expensive and competitive housing markets in the country. There is a great migration of new buyers moving to the region driving the demand. While we are seeing some price reductions across the markets, homes continue to retain their value, which are appreciating.
For middle income earners, this is especially true because while the region ranks third for cost of living, after New York and San Francisco. Miami now has a higher cost of living than Los Angeles. Wages are not as high in Florida, as they are in New York, San Francisco or Los Angeles to off set home prices. The effect: middle income earners who may be paying as much as 70% of their income on housing costs take a real beating. There is come concern that rising prices and tight lending standards continue to make it harder for younger buyers and first time buyers to purchase in South Florida. Despite these concerns, the market is healthy across all price ranges.
Prices are also rising in the luxury market, where we are seeing some reductions in prices of homes that sit on the market longer than sellers are comfortable. This market is fickler, and difficult to accurately price for compared to lower tier homes. Depending on how quickly the seller is willing to wait, prices will be reduced in order to move the property. Overall, home values in the luxury market rank among the highest the country too. There’s no question that South Florida is a really hot market right now. The good news is that despite rising home prices, there is no sign of a bubble in this part of the country. Homes are selling at a steady rate, and while real estate prices climb, they are not out of sight either or at bubble levels. 2016 will be a steady year for real estate.
Michelle Farber Ross