Miami’s real estate market is cooling

Miami’s real estate market is slowing down, according to the latest data from Redfin.

Why it matters: After two-plus years of plummeting inventory and sky-high home prices, Miami buyers can finally get some relief.

What’s happening: Homes sales are decreasing; inventory is increasing.

• “Buyers and sellers are trying to grasp the ever-changing economic conditions,” Fernando Arencibia Jr., board chairman of the Miami Association of Realtors, told Axios.

Yes, but: Arencibia expects Miami’s real estate market will hold strong as the city continues to see an influx of wealthy international buyers and “homebuyers from high-tax, high-density states,” he said.

The other side: Mortgage rates are above 6% for 30-year loans, which has pushed monthly payments drastically higher than they would’ve been a year ago, or even six months ago.

• Even as housing prices fall, monthly payments might put ownership out of reach for many.
• For example, a $600,000, 30-year loan costs $1,142 more a month than it did in 2021.

By the numbers: The market has steadily cooled since May, when median home prices peaked at $490,000 and 33.4% of listings sold for more than the asking price, per Redfin.

• In September, the median home sales price was $475,000, and only 18.8% of homes sold above list price.
• Inventory is down 12.3% year over year but has increased from record lows earlier in 2022.
• Closed sales are down 31.4% compared with this time last year.
• Price reductions are also rising. In May, 12.4% of listings reduced their original asking price; in September, that number jumped to 18.2%.

Yes, but: Homes aren’t sitting on the market as long as they did last year, per Redfin. In September 2022, homes sold in 50 days on average, compared with 55 days in September 2021.

• Arencibia says demand from international buyers has recently rebounded from pandemic lows.
• Pending sales are relatively steady — an indication that more demand is coming from outside Miami.