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“Miami Is Still a Seller’s Market.” Why the City Is Bucking a National Housing Trend
By Aly J. Yale MONEY RESEARCH COLLECTIVE
Talks of a housing market slowdown are rampant, with mortgage rates up and recession talk in the air. In most parts of the country, people just aren’t clamoring as much to buy homes these days.
Miami, though, appears to be a different story.
While demand has waned slightly in Florida’s biggest city, real estate pros say the market is weakening at a much slower pace than other markets seem to be. In fact, according to Realtor.com, Miami just notched the highest year-over-year price jump in the entire country — a 37% uptick over July 2021.
“The Miami real estate market is showing some signs of cooling — though it’s important to underscore that this is happening to a lesser degree than in other markets,” says Claudia Cobreiro, a real estate attorney and founder of Cobreiro Law and Top Notch Title.
More importantly, she says, “There is no sign of the momentum coming to a screeching halt anytime soon.”
How’s the local market for buyers?
While it’s true that Miami’s market has slowed, home prices haven’t dropped as of yet. And a buyer’s market? That’s probably not in the cards anytime soon.
Still, there are some advantages to buying now compared to a few months ago.
For one, there’s less competition. According to Redfin, about 38% of Miami buyers faced a bidding war in July. That’s down from 51% last year and well below the national average.
“There’s still a chance for there to be multiple offers on a home, but definitely not as many,” says Joel Freis, a Miami agent with HomeLight. “During the first quarter of 2022, a client’s bid was one of 10. Today, it’s one of three or so.”
Thanks to rising inventory, buyers also have more options to choose from and, agents say, more time to make decisions.
Most importantly, though, buyers have gained a bit of leverage. They don’t have to waive contingencies (a common sight in previous months), and they may be able to negotiate more without risking the deal.
“What I have seen in the last few months is a bit more negotiation by sellers in both their asking price and in contract negotiation,” says Steve McAleer, a realtor associate with The Agency Miami. “While the most desirable properties are still selling quickly and for strong prices, buyers are competing with fewer offers than before and are a bit more able to make reasonable offers.”
How’s the local market for sellers?
When it comes down to it, sellers still have the upper hand here in Miami. While they can’t expect wild bidding frenzies or dozens of over-asking prices, agents say the power remains largely theirs.
“Miami is still a seller’s market — one with more buyers than available properties for sale,” says Sebastian Vallejo, managing broker at Brown Harris Stevens in Miami Beach.
Still, he cautions, sellers need to be reasonable.
“It’s no longer an incredibly aggressive seller’s market, where sellers could force buyers to waive all contingencies or even have to buy sight-unseen to beat the competition,” Vallejo says. “Sellers still hold the cards, but those needing to sell must now allow some breathing room to buyers if they want to see the sale happen fast.”
Sellers should also keep in mind that nothing lasts forever. While prices will likely continue to increase in the near term, they’ll do so at slower rates than previously. And if rates remain high and the economy slumps into a recession, demand could fall enough for them to even reverse course.
According to a recent analysis from Fortune and Moody’s Analytics, Miami’s home prices are expected to decline by about 4% in 2023. In 2024, they could drop even further — another 2%.
“There should be a new urgency with sellers,” Freis says. “A lot of sellers were on the fence whether or not to list their homes during the first quarter of 2022. They had the mentality that they’d like to wait it out and see if prices continue to go up, but as interest rates continue to climb, it might be time for Miami homeowners to rethink their game plan.
