After a rapid growth cycle, the Miami real estate market is undergoing a stabilization process in the last months of 2024, attracting the attention of investors and analysts. This process is characterized by a sustained rise in house prices, reaching a peak in the middle of the year, followed by a slight adjustment as the market adapts to the new supply and demand situation.
Sustained rise in house prices
Since the end of 2023, Miami home values have shown a significant increase. The Zillow Home Value Index (ZHVI) rose from about $548,000 to a July 2024 peak of about $587,000. This growth is mainly due to the arrival of new residents, the attraction of foreign investors, and the interest of buyers looking to diversify their investments into an attractive and safe market.
The rapid rise in prices is also due to a limited supply of housing, creating intense competition among buyers and properties selling for close to, and sometimes above, list price. It was the cause. During this period of growth, sales prices steadily increased due to pressure on available inventory.
Stabilization and adjustment in the second half of the year
However, starting in July 2024, Miami’s real estate market began to show signs of stabilization. The average sales price in August reached $587,000, but the price growth curve has begun to flatten. The supply of real estate increased in the third quarter of 2024, with 4,987 units available in inventory by September 30, and 1,019 new listings in the same month. This increase in supply, while not drastic, has given buyers more choice and reduced upward pressure on prices.
Stability in prices suggests that the market has reached a point where supply and demand are starting to balance more naturally. This is reflected in the sales price to list price ratio of 0.971, indicating that most properties sold for slightly less than their original listing price. Furthermore, 72.9% of sales occurred at prices below list price, marking a change from the previous situation when it was more common for buyers to accept prices near or above list price.
Gradual price reduction: natural adjustment
The slight price decline observed since July can be interpreted as a market correction following the strong growth experienced in the first half of this year. This adjustment was gradual, suggesting a natural adjustment rather than a sudden decline. Sales remain active, but the pace of transactions is moderate compared to the previous month as properties are on hold for an average of 36 days, which also contributes to price stability.
Increasing inventories and stabilization of average prices indicate that the market has reached a stage of maturity after a period of significant expansion. The slower pace of sales and increased availability of homes has created an environment where buyers can more easily negotiate and prices can adjust more organically to market conditions.
Future outlook for the Miami market
The observed price stability and slight decline in the second half of 2024 does not necessarily indicate a decline in the Miami real estate market. On the contrary, it suggests healthy adjustments that could pave the way for more sustainable activities in the long run. As buyers and sellers adjust to the new situation, the Miami market is establishing itself as a place of opportunity for those looking to take advantage of its unique real estate environment. Expectations for the future point to a balance between supply and demand, with the market likely to continue to attract both domestic buyers and foreign investors.
Since January 2024, the Miami real estate market has faced significant challenges. At the beginning of the year, Miami-Dade home sales were down 26%, hit by rising mortgage rates that reached levels not seen since 2000. This situation led to a reduction in trade and complicated the purchasing power of many residents. . But by April 2024, opportunities began to emerge in the rental market. Some areas of Miami, such as Riverview and West Little River, stand out for offering more affordable rents, and those looking to live in the Sunshine City without facing the usual high costs We provide people with valuable options.
By mid-2024, Miami’s real estate market showed signs of recovery, with increased demand for luxury real estate and increased taxable real estate values in Miami-Dade exceeding $469 billion. While the home sales market continued to adjust, luxury real estate prices and home sales over $1 million continued to rise. At the same time, there are properties available for purchase under $300,000 in Miami, especially in areas like Doral and North Miami Beach, creating opportunities for buyers on a budget. But high home prices compared to other cities like Tampa and strong demand in neighborhoods like Brickell continue to worry local buyers.
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