Miami-Dade’s housing market sets price record, bucks national trend of deflating prices

For the second consecutive month, home prices soared to a record in Miami-Dade County, despite more than a year of double-digit monthly sales decreases.

Miami-Dade’s median sales price for single-family homes reached $620,000 in May, up from $575,000 a year ago and $600,000 in April, according to the housing market update released Thursday by the Miami Association of Realtors.

There was quite a contrast last month in neighboring Broward County, where the midpoint sales price for single-family houses was $585,000, down slightly from $586,000 in May 2022.

The skyrocketing home prices in the Miami area represent a long trend that accelerated during the pandemic. It can be blamed mainly on low housing inventory and continued strong buyer demand, real estate experts said. This scenario has left the county with an imbalanced housing market, favoring sellers and making it difficult for middle-class buyers to afford homes.

A balanced market consists of six to nine months of homes on the market. However, Miami-Dade’s housing sector remains out of balance with only a 3.3-month supply of houses and 5.1 months of condo inventory. Home availability was even tighter in Broward.

Although higher interest rates on mortgages have caused housing prices to fall overall in most of Florida and across the United States, Miami-Dade keeps bucking that trend. In short, people continue to relocate to the county from New York, Chicago and San Francisco, among other cities. Many of these newcomers earn high-paying salaries in finance, law and technology fields. They’ve consistently outbid locals for homes in Miami, often paid cash and have contributed to the runaway prices that make the Miami urban area one of the least affordable housing markets in the nation.

“Miami-Dade remains an attractive place. I’m [still] seeing reports of businesses moving to Miami-Dade. These businesses have high-salary positions and those employees can afford to pay for higher priced homes,” said Mark Thibodeau, assistant professor of real estate at Florida International University.

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“The rapid increase in sales and rents has led a lot of people to seek nearby Broward, and alternatives where housing is cheaper.”

Many South Florida middle-class and first-time buyers often opt for cheaper condominiums. Last month, median price tags for condos in Miami-Dade stayed even with a year ago at $415,000, but jumped in Broward to $270,000 from $253,500 in May 2022.

Although total home sales plunged for the 13th consecutive month in South Florida in May, the Miami Realtors’ group reported an annual spike of 12.9% of closings in which buyers paid between $600,000 and $1 million for a house or condo in Miami-Dade.

“We are starting to see more value in that price range. That’s an entry price point for Miami-Dade County,” said Danny Hertzberg, a sales associate for real estate firm, The Jills Zeder Group. “The second and third wave of relocations are (buying) within that price point.”

That lofty price range placed Miami-Dade well above the country in May, according to the National Association of Realtors housing update also released on Thursday. The median U.S. existing home sales price for houses and condos was $396,100 last month, down 3.1% from a year ago, making it the largest annual price drop since December 2011.

Compared to the rest of the country, South Florida also saw a much higher percentage in May of home purchases that closed with cash. Nearly 41% of home transactions last month were cash deals in Miami-Dade and Broward counties, considerably higher than the national average of 25%.

The key question for South Florida’s public- and private-sector leaders remains how to tackle the lingering housing-affordability crisis, a situation that’s gotten worse since the pandemic emerged in spring 2020.

Annie Lord, executive director of nonprofit Miami Homes For All, said one solution would be private-sector employers paying workers higher wages to match the rising cost of living and housing expenses.

Another solution, she said, would be building more homes for people working essential jobs — nurses, medical assistants, childcare workers, teachers, for example. They often struggle to buy homes or find affordable apartments to rent. The median rent for an apartment in Miami-Dade stands at $3,200 a month, according to RentHub.

Research done by Miami Homes for All and University of Florida shows nearly two-thirds of renters in Miami-Dade are cost-burdened. That means they are spending more than a third of monthly household income on housing costs. By comparison, a little more than a third of the county’s homeowners are cost-burdened.

“We’re not going to see the rental market take a dip, particularly anything priced below the median,” Lord said bluntly. “In the home market, I would be surprised if there was a dip below $500,000.”

Real estate agent Hertzberg said buyers seeking Miami-Dade houses priced below the median should look in Homestead and Miami Gardens. For cheaper condos, he recommended properties built before the 1990s in Edgewater, downtown Miami, Miami Beach and Aventura.

In Broward, aspiring buyers should search in Fort Lauderdale, Hollywood and Pompano Beach for houses and in Sunrise, Lauderdale Lakes and Lauderhill for condos, he said.

Looking ahead, “Miami-Dade will have a slow and steady summer and a flurry of [sales] activity at the end of the year due to the seasonality, but it won’t reach the historic high we saw a year or two ago,” Hertzberg said. “For Broward, the market will be relatively flat.”