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Miami housing market 2023

Jess Ullrich Troy Segal
Written by
Jess Ullrich,
Edited by
Troy Segal
Published on December 01, 2022 | 6 min read

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a view of Sunny Isles Beach, FL
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The hot housing market in Miami is cooling off — similar to what we’ve been seeing across the U.S. After two years of pandemic-fueled growth, sales have started to slow in the second half of 2022, as the Federal Reserve has increased interest rates considerably in an effort to fight inflation. Effectively making homes less affordable, more expensive mortgages have sidelined many would-be buyers.

Although it’s not immune to these national trends, the Miami market has some special resilience, too. Here’s a look at current trends, predictions, and whether now is a good time to buy or sell your house in The Magic City.

Miami real estate market trends

According to Redfin data, the median sale price of Miami homes was $475,000 in September 2022, a 17.3 percent year-over-year (YOY) increase from September 2021. While housing prices may have increased in Miami from September 2021 to September 2022, though, the number of homes sold over the same period has declined by 31.4 percent. Rising interest rates have impacted buyers’ ability to afford new homes in the area, which has resulted in declining sales.

However, when they can afford it, buyers do move fast. The average number of days Miami homes stay on the market sits at 50 for September 2022, a slight YOY decrease from 55 in September 2021.

Miami housing market predictions

Unfortunate news for the U.S. housing market: the Fed has suggested that interest rates will continue to remain high until at least 2023, potentially resulting in further declines in home sales both in Miami and in other U.S. markets. And while median sale prices in Miami saw a slight uptick from August to September, overall prices have been sliding steadily since peaking last spring.

Throughout 2022, the South has housed some of the hottest real estate markets in terms of sales and appreciation: In fact, out of the metro areas with the largest year-over-year price increases (over 18 percent) this last quarter, seven out of the top 10 were in Florida, according to the National Association of Realtors’ (NAR) Metropolitan Median Home Prices & Affordability Report for Q3 2022. And often in real estate markets, the bigger they rise, the harder they fall.

Is the Miami housing market going to crash?

Miami, however, was not among Florida’s fastest-growing markets. So it’s unlikely that the area would see a major market crash.

A number of factors make Miami perennially popular. It’s long been a destination for international firms seeking a U.S. HQ or place for investment. It’s also a well-established site for retirees and well-heeled individuals, both domestic and foreign, seeking a second or vacation home — and they’re returning in numbers as the pandemic eases, according to the Miami Association of Realtors. The professional organization projects that 2022 will be Miami’s “second-biggest sales year ever.”

But home prices will likely continue to drop in Miami as buyers press pause on home searches to avoid high mortgage rates. Already, according to NAR, the median home price for the region (which includes Fort Lauderdale and West Palm Beach in NAR’s data) has dropped from $589,000 in Q2 to $570,000 in Q3.

Should I buy or sell a house now in Miami?

Experts suggest the Miami market is trending in favor of buyers vs. sellers, but both home prices and interest rates are high right now. Those high costs mean it’s a challenging time to buy a house in Miami, and selling a house may also be tricky because affordability is a major hurdle for buyers.

To buy a median priced-home, you’d need an income of $127,587 to qualify for a mortgage with the standard 20 percent down payment, NAR estimates; or as much as $151,510 with only 5 percent down. According to U.S. Census data, the median household income in Miami is just $44,268, which is a big gap. However, Miami’s percentage of cash-paying buyers (38.1 percent) is significantly higher than the national average (26 percent), notes the Miami Association of Realtors.

Despite this and recent declines in total sales, home prices in Miami remain high compared with pre-pandemic levels. So it may still be worth it to list your home for sale, especially if you have significant equity in it — just don’t be surprised if it doesn’t sell right away. Also remember that you’ll need somewhere to live after selling your home, and existing-home price tags in Miami are around 4.5 percent higher than the U.S. median of $454,900 — though still cheaper than in other parts of Florida.

Finding a trusted real estate agent in Miami

Despite market shifts in Florida, selling your home with a Miami-based Realtor or real estate agent is still the best approach. Working with an agent often results in a higher sale price than what you’d get if you listed your home independently.

One of the best ways to find a trusted Realtor is to ask your family and friends for referrals. You may also need to research on your own if you’re not local to Miami and you’re buying your first home there. Once you’ve narrowed down your list, consider interviewing a few different candidates to find one that’s the best fit for you.

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Important note about Florida homeowners insurance
  • The home insurance market in Florida is in crisis. Since 2017, many insurance carriers have left the state, gone insolvent or tightened their underwriting restrictions, making it difficult for homeowners to find coverage. Many of the companies that remain have chosen not to renew existing policies, leaving owners in the lurch.
  • Fraudulent roofing claims are mostly to blame, and the devastating effects of Hurricane Ian in September 2022 complicated the issue further. According to a report from the governor’s office, Florida accounts for 79 percent of the country’s home insurance lawsuits.
  • New insurance-reform laws went into effect in 2022 to try to stabilize the situation, but it may be some time before these laws produce meaningful results, and homeowners could see premiums that exceed several thousand dollars a year. Before you buy a Florida home, consult closely with your real estate agent, and possibly a local attorney, to determine whether the property will be insurable at a cost you can afford.

FAQs

  • Median home sale prices have been trending downward in Miami since peaking in May 2022, though they did experience a slight uptick in September. Overall, though, prices remain fairly high despite recent declines, with median sales prices increasing by 17.3 percent from September 2021 to September 2022.
  • It’s a tricky time to buy a house in Miami, as mortgage rates and home prices remain high. This combination can make it challenging for buyers to afford new homes.
  • Depending on your situation, it may still be a good time to sell your house in Miami. Home prices have yet to decline to pre-pandemic levels, and those with significant home equity may turn a hefty profit from a home sale. Just be sure you have a game plan for where you’ll live after your home sells, as affordability is an issue for many buyers right now. Bankrate’s new house calculator can help you determine how much you can afford.
  • It’s always a good idea to work with a local real estate agent, especially if you are moving from out of town or out of state. Housing markets are extremely localized and can vary greatly, especially within a big metropolitan area like Miami’s.

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