In the first quarter of 2023, South Florida witnessed a sharp decline in existing home sales, despite a consistent inflow of buyers from other regions that drove up median prices for houses and condos. Consequently, these properties remain unaffordable for many locals. Miami-Dade County saw a 40% decrease in single-family home sales compared to the same period in 2022, while Broward County experienced a 27% drop.
The Miami Association of Realtors reported rising median home prices in both counties in March. In Miami-Dade, the median price reached $570,000, up from $540,000 the previous year, nearing its historic high of $579,000. Meanwhile, Broward's median price increased to $565,000 from $545,000 in March 2022. Condo prices remained stable in Miami-Dade at $400,000 and rose in Broward to $269,500.
Although the regional housing market has begun to slow down after its peak pandemic frenzy, many budget-conscious and first-time homebuyers are still unable to enter the market. Jason Damm, an assistant professor at the University of Miami, attributes this ongoing buoyancy to the influx of remote workers and corporate expansions in the region. He believes the market is stabilizing and becoming healthier after its earlier overheating.
The steady arrival of high-income professionals from the Northeast and West Coast, drawn by South Florida's warm weather, relaxed COVID-19 restrictions, and low taxes, has also contributed to the elevated home prices. Companies such as Citadel, Thoma Bravo, and BNP Paribas have established offices in Miami, following the influx of residents.
This soaring housing market has raised concerns among politicians regarding the potential negative impact on the local labor market and economy. Former Florida Governor Jeb Bush emphasized the need for the emerging tech sector to engage local residents who are increasingly priced out of their city. He stressed that incomes must grow at the same pace as living costs to prevent locals from being left behind.
The housing market is currently characterized by a high percentage of cash transactions, likely due to buyers seeking to avoid higher interest rates. Inventory levels have nearly doubled in the past year, with Miami-Dade having 3.5 months of houses and 4.7 months of condos available, while Broward has 2.7 months of houses and 3.2 months of condos on the market.
Looking ahead, real estate experts anticipate condo prices to decline in late 2023 and early 2024 due to increased supply from recent developments. However, single-family home prices are expected to hold steady or increase because of limited inventory and high land costs. Proposed legislation limiting foreign buyers from certain countries may also impact the market, potentially reducing demand and prices if it becomes law.
