Miami, FL Real Estate Market Trends & Analysis [Updated 2020]

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The Miami real estate market is nothing short of impressive. Located on the Southeast tip of the Florida peninsula, The Magic City has developed a reputation for pristine white-sand beaches, great weather, even better food, and an eclectic culture that can’t be found anywhere else. It is worth noting, however, that such regional offerings have given way to one of the hottest real estate markets in the country.

The Miami housing market is the primary beneficiary of a highly desirable location, for both commercial and residential aspirations. Due, in large part, to a strengthening economy and growing confidence in the housing sector, local inventory has become a commodity for anyone with their finger on the pulse of real estate investing. There are many reasons for buyers, sellers and investors to be interested in the Florida city, which begs the question: Is Miami real estate a good investment? Better yet, is it a good time to buy real estate in Miami?

Foreign and domestic real estate investors, in particular, have found that Florida’s most famous city can serve as a lucrative backdrop for savvy entrepreneurs. However, it’s not enough to simply invest in Miami real estate without a plan; you need to listen to what the market is saying and translate each fundamental indicator into a viable action plan.

Let’s take a look at some of the many reasons someone might want to invest in Miami real estate, and the various exit strategies which are proving most useful to their efforts.

Miami Real Estate Market 2020 Overview

  • Median Home Value: $366,519

  • 1-Year Appreciation Rate: +0.6%

  • Median Home Value (1-Year Forecast): +3.0%

  • Average Days On Market (Zillow): 142

  • Median Rent Price: $2,450

  • Price-To-Rent Ratio: 12.46

  • Unemployment Rate: 2.2% (latest estimate by the Bureau Of Labor Statistics)

  • Miami-Dade County Population: 2,761,581 (latest estimate by the U.S. Census Bureau)

  • Miami-Dade County Median Household Income: $48,982 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 18.12%

  • Foreclosure Rate: 1 in every 1,092 (9.1%)


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Miami real estate investing

2020 Miami Real Estate Investing

The Miami real estate market is at the forefront of many national trends, not the least of which have to do with investing. Not unlike the majority of the United States, Miami real estate investors have enjoyed a lucrative run since the last recession. Real estate investors and homeowners across the country, in fact, have enjoyed several years of seller gains and attractive ROI (return on investment). According to Attom Data Solutions’ most recent Home Sales Report, the average home seller in 2019 “realized a home price gain of $65,500 on the typical sale, up from $58,100 last year and up from $50,027 two years ago.”

The report acknowledges that profits “represented a 34 percent return on investment compared to the original purchase price, up from 31.4 percent last year and up from 27.4 percent in 2017, to the highest average home-seller ROI since 2006.” Simply put, average U.S. home seller profits are higher than they have been in approximately 13 years, and real estate in Miami has done its best to increase said averages. Appreciation rates over the course of the last decade have helped the Miami real estate investing community increase profit margins year-over-year.

It is worth noting, however, that the Miami housing market appears to have reached a tipping point. Prices are appreciating at such a historic rate that profit margins for flippers and wholesalers are growing slim. That’s not to say one can’t pursue a rehab career here (it is entirely possible), but rather that there exists an even better exit strategy for today’s current market environment: long-term rental properties.

According to Attom Data Solutions’ 2020 Rental Affordability Report, home prices are rising faster than average weekly wages in Miami-Dade County, FL, which is expected to add to the city’s already renter-heavy population. No more than two years ago, 68.0% of the city’s residents were renters, and that number is only expected to have gone up in the face of historic appreciation.

Is buying a condo in Miami a good investment (or any other type of rental property for that matter)? IT would appear as if the answer is a resounding “yes.” Despite eight consecutive years of appreciation, it is more affordable to own a home than to rent one—albeit slightly. According to Money.com, renters should expect to spend 51.0% of their wages on rent (on average). Buyers, on the other hand (assuming a 3.0% down payment), should expect to spend a slightly more modest 50.9% of their wages on a mortgage.

While almost negligible, the city’s price-to-rent ratio bodes incredibly well for the Miami real estate investing community. In addition to boasting one of the country’s largest renter populations, the Miami housing market will simultaneously reward rental property investors with relatively cheap and desirable assets. Not only that, but the rental property market can help investors offset today’s higher prices with years of cash flow.

There is absolutely no reason Miami real estate investors can’t rehab and wholesale properties; there are plenty of ways to do so (especially with the city’s high foreclosure rate). However, current market conditions lean heavily in favor of rental property investors. With a median rent price of $2,450, justifying the city’s median home value is a lot easier. Additionally, apartment complexes make up about 55.8% of the city’s homes, according to NeighborhoodScout. At the moment, rental properties appear to be not only the best investment strategy, but also the most abundant.

2020 Foreclosure Statistics In Miami

Miami real estate investors are certainly aware of their city’s diminishing profit margins. Today’s high prices have made it harder to find deals worth flipping and rehabbing. While it may be harder to find a viable deal, it’s far from impossible. The same high prices responsible for squeezing profit margins are also a leading cause of foreclosure. With one in every 1,092 homes in some state of foreclosure, the city has an incredibly high foreclosure rate. At 9.1%, in fact, Miami’s foreclosure rate is more than double the national average.

The foreclosure rate in Miami is not only high, but it continues to increase. As recently as January, “the number of properties that received a foreclosure filing in Miami, FL was 40% higher than the previous month and 4% higher than the same time last year,” according to RealtyTrac. The latest increase places foreclosure inventory somewhere in the neighborhood of 4,806 properties, not the least of which represents a great opportunity for the Miami real estate investing community. If for nothing else, distressed homes are more likely to be acquired at a discount; one that can exponentially increase profit margins.

While the status of distressed homes is fairly evenly distributed between pre-foreclosures, auction homes, and bank-owned homes, pre-foreclosures make up the majority of the city’s distressed inventory. Representing 38.4% of all foreclosures, pre-foreclosures are the most abundant source of distressed homes. Another 32.6% of the city’s distressed inventory is bank-owned, and 28.9% is reserved for auction. As a result, Miami real estate investors would be wise to place an emphasis on pre-foreclosures; that way, they’ll give themselves the best odds of landing a deal below market value.

The best neighborhood to invest in Miami may be up for debate, but those looking to increase their chances of landing a foreclosed property should look where the distributions of distressed homes are the highest. Below is a list of the zip codes with the highest distributions of distressed homes:

Foreclosures in Miami

Data provided by RealtyTrac

2020 Median Home Prices In Miami

The median home price in Miami is a healthy $366,519, according to Zollow. It is worth pointing out, however, that today’s price is indicative of nearly a decade’s worth of appreciation. Real estate values haven’t always been as high as they are today. As recently as the first quarter of 2012, the median home value was around $204,000 (at the time, the Great Recession had already taken its toll). However, it was also during the first quarter of 2012 that home prices in Miami started to appreciate—and never look back. Since bottoming out during the last recession, the median home value has appreciated 79.6% in the wake of a strengthening economy, increased optimism and a lack of inventory.

Certain neighborhoods across the city have contributed more to rising home prices than others. Dating back to the turn of the century, in fact, these Miami neighborhoods have appreciated the most (according to NeighborhoodScout):

  • Buena Vista

  • N Miami Ave / NW 36th St

  • S Miami Ave / SW 1st St

  • City Center

  • SE 2nd Ave / SE 1st St

  • E Flagler St / NE 2nd Ave

  • N Miami Ave / NE 14th St

  • Miami Dade College / Biscayne Blvd

  • NW 7th Ave / NW 17th St

  • Bayshore

To put things into perspective, the median home value in the United States is currently $245,193. Much like the Miami real estate market, the national market saw prices increase for eight consecutive years. However, in the time prices increased nearly eighty percent, the median home value across the country increased a more modest 53.2%. This difference is less of an indictment on the national real estate market, and more of a testament to how desirable the Miami housing market is at the moment.

Moving forward, the Miami real estate market should experience a temperance in appreciation rates. In lieu of the Coronavirus and the real estate market impact many are expecting, Miami’s prices could look different from what many projects forecasted for 2020. Shelter in place orders issued by the government, in particular, should cut back on activity, which begs another question: Are real estate prices going down in Miami? The simple answer is probably, but only for a short period of time. The simple fact remains: there is still too much pent-up demand. Homebuyers are still on the market, and with fewer listings available, the asking prices should increase sooner rather than later. When all is said and done, many expect prices to drop very modestly, but to make a full recovery within a year. At the very least the temporary setback could represent a good buying opportunity.

Median home prices Miami

Data presented by Zillow

Miami Real Estate Market: 2019 Summary

  • Median Home Value: $335,100

  • 1-Year Appreciation Rate: 1.5%

  • Median Home Value (1-Year Forecast): -0.9%

  • Median Rent: $2,400

  • Average Days On Market (Zillow): 127

Miami Real Estate Investing 2019

Miami real estate trends, much like the rest of the country, saw dramatic increases in prices over the course of 10 years. However, 2019 brought about a modern temperance in price appreciation for the Miami housing market. For the first time in a while, 2019 saw median home values decline, albeit slightly. That, combined with an increase in foreclosure activity, really catered to the Miami real estate investing community.

Last year, the median home value increased a modest 1.5% over the course of a year (June 2018 to July 2019), bringing it to $335,100. That was in stark contrast to the national trend, which saw median home values increase by as much as 5.2% over the same period. Regardless, the Miami housing market had trouble keeping pace with the national trends.

In examining the largest markets across the nation with the greatest annual increase in foreclosure starts, four out of the five markets were in Florida. Orlando, Jacksonville, Tampa-St. Petersburg, and Miami all posted a year-over-year increase in foreclosure activity in the first six months of 2019. That’s an important distinction to make, as the majority of large markets across the country (84%) saw year-over-year decreases in foreclosure activity. Local real estate, in particular, saw an increase in foreclosure activity of 7.0% over the course of the previous year. Consequently, there wasn’t a single city that saw more foreclosure filings.

Real estate investors were in a great position to find and acquire discounted foreclosures. Miami was just one of the few cities that actually posted a year-over-year increase in foreclosure activity in the first six months of 2019, but it also posted one of the largest increases in that time (up 7.0%). That’s a considerable amount, considering the majority of markets saw a decline in activity.

Miami Real Estate Market: 2016 Summary

  • Median Home Price: $286,700

  • 1-Year Appreciation Rate: 8.2%

  • 3-Year Appreciation Rate: 27.4%

  • Unemployment Rate: 4.9%

  • 1-Year Job Growth Rate: 2.5%

  • Population: 441,003

  • Median Household Income: $46,946

Miami Real Estate Investing 2016

According to Miami real estate news, the market was thriving in 2016. Home prices and appreciation rates surged past the national average. The median home price for the Sunshine State was $286,700 during the first quarter, compared to the national average of $215,767. Along with an upswing of investment activity, appreciation rates continued to soar past the national average, further boosting the confidence of both the Miami real estate investing community and homeowners.

For those looking to grow equity in their homes, there was no better place than the Miami real estate market in 2016. Homes appreciated at a rate of 8.2% year-over-year, compared to the national average of 6.1%. For homeowners and investors, gains in the previous three years extended the trend of positive price growth after the recession, with price appreciation and principle payments boosting total equity growth.

The first quarter of 2016 was extremely kind to the local market. Along with home prices outpacing the national average, and total home equity rivaling the rest of the country, the economic landscape drove the real estate market going forward. At the time, the unemployment rate was better than the national average: 4.9% compared to 5.0%. On top of that, job growth during the first quarter accelerated at a pace of 2.5%, compared to the national average of 2.0%. Unemployment was not only better than the national average, but was growing at a rate above the national level.

Miami Real Estate Market: 2014 Summary

  • Median Home Price: $270,000

  • 1-Year Appreciation Rate: 3.8%

  • Unemployment Rate: 6.1%

  • 1-Year Job Growth Rate: 2.9%

  • Population: 417,650

  • Percent of Underwater Homes: 25.3%

  • Median Income: $44,000

  • Average Days on Market: 45

Miami Real Estate Investing 2014

Miami real estate news was generally positive in 2014.Buyers, both foreign and domestic, showed immense interest in the Miami housing market in 2014. It was in their best interest to create opportunities for buyers and sellers of every level. As a result, the Miami housing market became one of the most prominent in the United States in the years following the recession. In fact, the market took the form of an export economy, as foreign buyers continued to invest in the area. At the time, 90.0% of all the new downtown construction was due to demand from foreign investors.

The median home price was $270,000. The average property was priced nearly $50,000 more than the national average ($216,567). As a safe-haven for international investors, the local market benefited from international buyers who were looking to escape economic turmoil from their home country. For all intents and purposes, Miami real estate investing was a better alternative than anything they could do where they were from.

Miami County Map:

Map of Miami market

Have you thought about investing in the Miami real estate market? If so, what are you waiting for? We would love to know your thoughts on real estate in Miami in the comments below.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either expressed or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.
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