Even though the housing market in Miami is still way above the rest of the nation’s performances, the growth is slowing down as compared to the past few years.
Miami metro area has seen the prices of single-family homes rise by 8.6% in the Miami metro area lately, whereas it used to be a double-digit growth last year. However, it is still the 2nd larger gain among US cities after San Francisco – the tech city.
There should not be much to worry about though. Indeed, it is a healthy and expected slowdown as the demand has lately been led by deal-oriented investors and South American buyers purchasing secondary homes. As prices keep on going up, it had become harder to strike bargains, hence a progressive slowdown. The forecast is that the market will keep on growing but at a slower rate. Bear in mind that it is still doubling the average national rate that is 4.7%. In Downtown Miami, when we look at the volume of sales and the price difference between 2014 and 2015 we notice a big disrepancy. For example at the 900 Biscayne the volume of sales has gone down 22% but prices are up 3%. Even worse at the Asia condo were the volume of sales is down 62% but prices are up 9%. Does it mean that seller's have unreasonable prices so the majority of buyers are unwilling to match them? Does it mean that Miami has reached a peak? is it time for a markte adjustment?
Back in 2007, the annual growth rate of Miami’s housing market was around 30%, the highest and most unsustainable point ever. Now, preconstructions push demand down as they multiply in Downtown Miami and Brickell. Single-family homes remain a lucrative business: the risk is minimal and they attract foreign buyers looking into selecting their secondary homes. Not only do they pay cash, they also put down high deposits and contribute in lifting the market.
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