According to a recent report, the Miami-area real estate market is one of the hottest in the country as of spring 2022. This is largely due to a shrinking inventory situation.
With fewer homes and condos for sale in the Miami area, buyers must compete fiercely with one another. These conditions have boosted home prices by double digits over the past year alone.
But what about the rest of this year, and into 2023? Will the fast-paced Miami housing market ever slow down?
No one can predict future sales trends with complete accuracy. But it seems likely that the Miami real estate market will remain highly competitive for many months to come. Tight inventory conditions will continue to fuel competition among buyers. But we could see a slowdown in terms of home-price growth.
Major Inventory Decline for Miami Real Estate Market
At the end of March, researchers from Realtor.com published a housing market report with data for the nation’s 50 largest metropolitan areas. According to that report, the real estate market in the Miami-Fort Lauderdale-West Palm Beach metropolitan area experienced the biggest decline in real estate listings.
And we’re talking serious shrinkage here.
From February 2021 to February 2022, the total number of active property listings within the Miami area real estate market declined by -51%. That was the largest year-over-year reduction among the 50 metro areas covered in this report.
This means home buyers who plan to enter the Miami housing market in spring or summer of 2022 will have fewer properties to choose from, compared to a year ago. It also means the Miami real estate scene will remain highly competitive for the foreseeable future, as buyer demand continues to exceed supply.
This South Florida housing market stood out in other ways as well. According to Realtor.com, the Miami metro area experienced the biggest year-over-year increase in median list price. (This is the median or midpoint for real estate listings within the area, based on Realtor.com’s data.)
According to the March 2022 Realtor.com report, the median list price for this housing market rose by a whopping 37% over the past year or so.
Recent data from Zillow revealed that the median home value for the Miami-Fort Lauderdale-West Palm Beach metro area rose 24% in the past 12 months alone.
Homes Are Selling Much Faster Than a Year Ago
Given the worsening supply-and-demand imbalance within the Miami real estate market, it should come as no surprise that homes are selling fairly quickly in the area.
In fact, the Miami area housing market experience the biggest year-over-year reduction in the amount of time homes spent on the market. The median number of “days on market” declined by -32 days over the past year or so, according to the Realtor.com report.
Among the nation’s larger metropolitan areas, homes saw the greatest annual decline in time spent on market in the southern metros of Miami (-32 days), Raleigh, S.C. (-19 days), and Orlando, Fla. (-19 days).
Will the Miami Housing Market Cool in 2022 or 2023?
Real estate market “temperatures” can change dramatically from one year to the next. The hottest housing markets of today could become the coolest ones in a year or two.
Which begs the question: Could a highly competitive real estate scene like Miami Florida cool down later in 2022, or into 2023? That now seems possible.
While the lopsided supply-and-demand situation will likely favor sellers over buyers for the foreseeable future, a slowdown in home-price growth is almost inevitable. In fact, we’ve seen some recent signs that home prices could be cooling within the Miami and South Florida housing market.
According to a February 2022 report from the Miami Herald, home prices are showing signs of softness in the area. As the Herald wrote:
“House hunters, however, are catching some relief — as prices steadied or dipped for the first time in months. Single-family home price growth cooled in January compared to the previous month. In Miami-Dade, sales prices fell for the first time since September, dropping to $520,000 from $525,000. Meanwhile, in Broward, they remained the same for two months in a row at $500,000.”
The Miami Realtors Association also acknowledged that a slowdown in home-price growth seems likely in 2022. In February, the association published a report that said rising mortgage rates and other factors “should ease the growth of median prices” going forward.
For Now, Buyers Should Prepare for Competition
But don’t let this “easing” and “cooling” language fool you. Tight supply conditions will continue to drive fierce competition among home buyers within the Miami real estate market.
Forecasts and predictions might point to a possible slowdown in price growth. But even if that transpires, the South Florida housing market will likely remain active and competitive for the foreseeable future.
Disclaimer: This report includes long-range predictions and forecasts for the Miami real estate market. Such views are the equivalent of an educated guess and should be treated as such. The Home Buying Institute makes no assertions regarding future housing or economic conditions.