‘We have the demand now’: Real estate outlook stronger for second-half of 2023 | Real Estate

What’s in store for the South Florida real estate market during the second half of 2023?

With a limited amount of housing inventory currently available, and more people moving in, finding that right balance has been a challenge.

Jamie McCaughan Tompkins, a real estate agent with the McCaughan/Mandiola Team at Coldwell Banker Realty on Key Biscayne, said Friday that just 26 houses on the island were for sale, where normally about 130 would be on the market as schools let out for the summer.

“And only 12 of those are under $5 million,” she said.

As far as condos, less than 130 are currently on the market. “Normally, we’d have hundreds, hundreds,” she said. “Our inventory has not corrected like I thought it would.”

Miami is emerging as the country’s newest technology hub for incoming companies.

“With that comes a lot of growing pains,” she said. “We don’t have the school system nor the infrastructure here (to meet that). We still have a lot of demand, but the inventory is still low, so the deals are harder and you’ll find they’ll negotiate more. Things have changed.”

McCaughan Tompkins has been in the real estate business for 20 years on Key Biscayne, and her mom, Joan, also a Realtor, has been in the business 40-plus years, so the changes in the industry have been evident.

Correctly priced homes are continuing to sell fairly quickly, according to a recent Moving to Florida Guide article, looking at the latter half of 2023.

In that story, it notes, “The demand for Florida real estate has been exceedingly strong over the past few years, but now in late May of 2023, the Florida market is undergoing a healthy re-balancing with the higher interest rates and increased cost of borrowing.

“During the pandemic, Florida experienced a new work-from-home economy, increased demand from corporate investors, as well as a large influx of people relocating to the Sunshine State, much higher than the normal snowbird activity.”

“On Key Biscayne, families are coming into a small town, but it’s a small town in a big city,” McCaughan Tompkins said. “We have clients who have been looking for a long time, and their budgets are pretty healthy.”

At the end of April, the median single-family Florida home price was $410,000, reflecting a flat year-over-year price change, according to the Moving to Florida Guide’s “how expensive is it to live in Florida” data.

Condos were at a median price of $325,000 across the state, a 5% increase from the $310,000 level a year ago.

But, when it comes to the Miami-Fort Lauderdale-West Palm Beach market, median home prices soared to $585,000, and condos were at $326,000.

The Naples-Immokalee-Marco Island metro area led the state by far with a median price of $922,500 for homes and $545,900 for condos.

According to www.FloridaRealtors.org, from its April 2023 edition, inventory across the state is now at 2.6 months of inventory (far ahead of the 1.1 months of inventory last May) and Florida home prices have now risen three consecutive months, after seven months of price decline.

Housing inventory in Miami dropped 3.6% from March to April, down to 5,673 available homes, according to Rocket Mortgage, which also noted a steep 26.6% decrease in sales from March to April (from 1,126 to 826).

On Key Biscayne, 20 houses were sold in April, down 13% from the previous month, another Rocket Mortgage report indicated. Sales over the past 12 months have translated to a median price of $1,450,000, actually 2.9% less (or $43,750 less) than a year ago.

That report indicated that 85% of homes on the island sold below asking price last month.

“It’s hard all-around,” McCaughan Tompkins said, pointing out the lack of inventory and the fact there’s not enough room in private schools to accommodate those hoping to move into the Miami area, specifically Key Biscayne, Pinecrest or Coral Gables, for example.

She did say there still is a high level of demand for condos.

So, for the next six months, at least, McCaughan Tompkins doesn’t expect things to change drastically.

“We have the demand now,” she said. “Key Biscayne is one of the best places to live. People see the safety, the small-town feel and … now we have an abundance of families (as opposed to part-time residents).”

She said a lot of European and Latin America property owners stay here in the summer and rent their homes for the winter, based on their specific climates.

“If they don’t own, it’s very expensive,” McCaughan Tompkins said. “Some just rent it for three months, but the rental market is priced out.”

Miami Realtor Geoff Fahey, speaking in the Moving to Florida Guide story, said: “While current inventory levels in the spring of 2023 have risen to a more healthy level of 6 months vs. 1.4 months (in Miami) as was during the market peak, the average Miami home price has risen to $532,000, which represents a 15.5% year-over-year increase.”

He also pointed to a strong international demand and the fact Miami is now ranked No. 2 to New York on the East Coast for the most financial institutions, which is perfect since many housing deals are cash only or heavy cash up front, he said.

Fahey also sees a trend of a younger demographic buying investment properties to convert into Airbnb and VRBO homes.

In addition, he believes Miami housing prices will remain on the upswing.

Do all these facts and figures worry real estate agents, such as McCaughan Tompkins?

“I’m not scared; there’s only so much that can be done,” she said. “What’s scarier is that there’s a lot of animosity still in our small town … What scares me is social media, the abundance of misinformation that’s out there … No one’s developing on Key Biscayne.

“All this (vision planning) is just making it better for everyone.”