Florida is one hot state, literally and figuratively. According to recent data from the National Association of Realtors, it was the most moved-to state in the country in 2022. As one of Florida’s largest and most popular cities — with the obvious appeal of great beaches, nightlife and restaurants, as well as a distinct local culture — Miami sees its own fair share of real estate buzz. If you’re thinking of buying or selling a home in the area, here’s what you need to know about the state of Miami real estate.
Miami housing market
The Miami housing market is unique in a lot of ways. For starters, this is largely a city of renters. Nearly 70 percent of the city’s occupied housing units are occupied by renters, according to U.S. Census data, meaning only about 30 percent of the city’s residents are homeowners.
Real estate investors are also a big part of the market here, with many owning tourism-associated properties and vacation rentals. Foreign investors in particular accounted for 17 percent of home sales in Miami between August 2021 and July 2022, according to Axios, with a third of them paying for the purchase in cash. Recent bills in the Florida legislature aim to limit which foreign nationals may buy property in the state.
For Miami residents, the market stats can be a bit confusing. Whereas home prices are dropping in many other parts of the country, the Southeast is booming, and prices are on the rise in Miami.
According to Redfin data, the median sale price here actually shot up 7.5 percent between April 2022 and April 2023. However, homes are taking longer to sell — a median of 66 days on the market, as compared to 49 in April of last year — and the number of homes sold is down a whopping 41 percent year-over-year.
“The market is at a very interesting place right now,” says Meghan Maloof Berdellans, a broker with Miami real estate firm Interealty Exchange. “Sellers are still at an advantage, even though it’s cooling down from the way it was last summer.” In other words, it’s still a good time to sell a house in Miami, but things are not as desperate for buyers as they once were.
Living in Miami
Miami has a lot to offer, which of course is why so many people want to live here. However, there are some things you should know before packing your bags.
- Like many tourism-heavy cities, Miami has a high cost of living, compared to the rest of Florida as well as the rest of the U.S. If you’re moving from somewhere like Washington, D.C., or New York City, this may not be a big deal. However, if you’re arriving from a more affordable locale, don’t expect your dollar to stretch as far.
- Along with Miami’s high home prices — the median price here in April was $575,000, compared with the nationwide median of $388,800 — come high property taxes as well. Miami-Dade County’s property tax rate typically comes to about 1.02 percent of a home’s assessed value, which is one of the highest rates in the nation.
- The county also charges a transfer tax on the sale of homes, known as a documentary stamp tax. This runs an extra 0.6 percent of the sale price.
- The cost of protecting your home here is quite high as well. Homeowners insurance in Florida can run much higher than in most of the country, due to both weather issues (like hurricanes) and a high rate of insurance fraud — see the box below for more details on the home insurance situation in the state.
- In addition, separate flood insurance is likely necessary beyond the typical homeowner’s policy. As part of local real estate laws, sellers are required to disclose whether a property is located in a flood zone.
- Finally, the county levies a 7 percent sales tax. But there is some good tax news for Floridians in general: The state does not charge any income tax for individuals at all.
The city of Miami has at least two dozen distinct neighborhoods, and that’s not counting nearby municipalities like Miami Beach, Miami Lakes and Miami Springs.
From Allapattah to Wynwood, the city is full of unique areas to live.Here are some popular options:
- Coral Way: With its banyan trees and classic Spanish houses, Coral Way is close to the action downtown, but far enough removed to have a quiet, residential feel.
- Downtown: Downtown Miami is where everything is happening: cafes, shops, nightlife and parks are all part of this thriving neighborhood.
- Coconut Grove: Also known simply as “the Grove,” this is an incredibly green and historic part of Miami with a laid-back vibe, an eclectic business district and an active community.
- Wynwood: An entertainment district with booming art and fashion scenes, Wynwood’s hip streets are lined with murals, galleries, restaurants and shops.
Miami real estate agents
Whether you’re selling or buying real estate in Miami, it pays to have a professional by your side to navigate the process. That’s where a knowledgeable local real estate agent comes in. An experienced Miami agent will help sellers determine how much their home is worth, then help list the house, field offers, negotiate and guide the sale to a close. Agents are also indispensable for buyers, helping you figure out how much house you can afford and where you can find the right property for you, then guiding you through the offer and closing process.
Alternatives for selling your Miami house
While you can go the traditional route of selling a house, you have some other options. In Miami, these include:
- Cash-homebuying companies: Many homebuying companies operate in Florida, offering sellers quick cash and a fast closing — sometimes in as little as 7 to 14 days. However, these companies are typically aiming to fix and flip homes for a profit, and they almost certainly won’t offer you top dollar for your property.
- iBuyers: Similarly, iBuyers like Opendoor, which currently operates in the Miami area, make quick cash offers and close much faster than traditional, agent-assisted sales do. But you’re also unlikely to get full market value for your home, and these companies often charge steep fees in exchange for their speed and convenience.
- Hold and rent: If you don’t need the cash from a sale immediately, consider renting it out instead. There are plenty of renters in Miami, and becoming a landlord could provide you with a steady source of income.
Next steps: Moving to Miami
Whether you’re moving from out of state or simply relocating from one Miami neighborhood to another, your first steps should be to get your finances in order and get yourself preapproved for a mortgage. This covers two important aspects of the home buying process: It tells you how much a lender would be willing to loan you, which helps you budget, and it tells sellers that you are a qualified buyer, which helps you stand out from the competition. Next, hire a real estate agent. Interview several possibilities to find the right one: You want to work with someone who knows the area well and can help you find a place that fits both your budget and your lifestyle.
- 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.
Are real estate prices dropping or rising in Miami?
How does Miami real estate compare to the rest of Florida?
As of April 2023, the median home sale price in Florida overall was $400,900 according to Redfin. Miami’s median price was $575,000, a difference of $174,100. Miami is more expensive than many other popular Florida markets, including Tampa (which has a median price of $410,000), Jacksonville ($293,995) and Orlando ($360,000).
Is it a good or bad time to buy and sell real estate in Florida?
It is a good time to sell real estate in Florida. Home prices are continuing to climb statewide, despite the fact that properties are staying on the market longer before selling. Between high prices, high mortgage rates and high homeowners insurance costs, Florida buyers face a lot of challenges in the current market.
This article originally appeared here and was republished with permission.