Experts and their data differ on the future of South Florida’s real estate market | Real Estate
Is Miami headed for a housing crisis, or are home prices ready to rise again?
Well, it might depend on which statistical data you prefer.
A recent report by GOBankingRates.com, titled “7 Florida cities that could be headed for a housing crisis,” includes Miami, but an article by Goldman Sachs researchers last week, titled “Miami to escape the home price correction in 2023,” shows that home values in the Magic City could be back on the upswing.
Ron Shuffield, President and CEO of Berkshire Hathaway HomeServices EWM Realty in Coral Gables, was excited to share a copy of the Goldman Sachs story with viewers as he presented the company’s 2023 Insight Market Update on Wednesday morning.
“They expect our values to (increase) the highest in the country,” he said. “It’s .8%, which is small growth, but Miami is getting more recognition. … it’s so positive, a very positive piece that we should be using when marketing (homes).”
The predicted rise in home values (also Baltimore at .5%) is far better than being on the opposite end of the scale, where Austin, Texas, is forecast to face a 15.6% decline, just ahead of San Francisco (-13.7%) and San Diego (-13.4%). Even Tampa (-11.2%) is on the negative side.
The story, available only by subscription, goes on to say: “While the investment bank expects U.S. home prices to fall 6.1% in 2023, it doesn’t expect a prolonged downturn like the previous bust. In 2024, Goldman Sachs expects U.S. home prices to rise 1% even as markets like Austin and Phoenix continue to fall.”
According to statistics gathered from MLS data, Shuffield showed Miami-Dade County remains a stable market, and although sales have been down, home values still climbed.
From Q4 2022 to Q4 in 2021: inventory rose 70%; the months of supply increased 148% (from 2.1 months to 6.2); total sales were down 37% (3,848 down to 2,428); and the median price rose 11% (from $503,000 to $668,000).
As far as condos during that same period, inventory rose 8%; supply was up 74% (from 2.4 months to 6.0); total sales were down 44% (from 6,192 to 3,471); and the median price went up 12% (from $343,000 to $365,000).
The GOBankingRate.com story painted a different picture after its researchers looked at vacancy rates for owned and rental homes; the percentage of delinquent mortgage days; and even foreclosures.
That story read, in part: “Florida seems to be a state that people are always flocking to and never leaving, with its temperate weather, great beaches and lots of excellent attractions. However, even Florida is feeling the results of market forces, which are increasing mortgage rates, driving up home prices, and thus driving out people.
“In fact, the Florida cities on this list are showing alarming signs that could be pointing toward a housing crisis.”
The list:
7. Pembroke Pines
* Homeowner vacancy rate: 0.9%
* % of mortgages delinquent 90 days: 0.7%
6. Hollywood
* Homeowner vacancy rate: 1.6%
* % of mortgages delinquent 90 days: 0.6%
5. Jacksonville
* Homeowner vacancy rate: 2.0%
* % of mortgages delinquent 90 days: 0.6%
4. Miami
* Homeowner vacancy rate: 2.2%
* % of mortgages delinquent 90 days: 0.6%
3. Gainesville
* Homeowner vacancy rate: 3.6%
* % of mortgages delinquent 90 days: 0.6%
2. Fort Lauderdale
* Homeowner vacancy rate: 4.1%
* % of mortgages delinquent 90 days: 0.6%
1. Orlando
* Homeowner vacancy rate: 5.0%
* % of mortgages delinquent 90 days: 0.5%
Shuffield told his viewers he believed, “We’re going to see a softening of prices (this year) with more inventory coming.”
He said, during the pandemic spike in values, from the spring of 2020 to the spring of 2022, “people were pushing (the median price) to $525,000, $540,000, $580,000, but in the last six months it’s come down to $539,000 today, so that shows there’s been some anxiety in the market. (But) we don’t expect a straight line down,” he added, pointing to a graphic.
His best advice?
“If you’re a young buyer, just get in the game. Even a 6.5% interest rate is certainly manageable … if you can qualify. There’s never that perfect time, prices in real estate (do fluctuate).
“I moved here in 1975,” he said, looking out the window from his office. “I could have bought any of these homes back then for $75,000. Today, those same homes go for $1 million or $1.1 million.”
