Miami’s Home Prices Are Plunging

Prices of homes in Miami fell by more than 11 percent last month, helped by declining interest in single-family properties and growing availability of condos in the market, according to Realtor.com.

In May, condos made up two-thirds of homes that were in the market for sale. The share of condo listings has been going up for more than a year. Their growing availability has contributed to the overall pricing of properties in the Miami market, according to Realtor.com’s senior economic analyst Hannah Jones.

“Condos tend to be priced significantly lower than single-family homes in Miami, which means that overall median listing price will move lower as condo share increases,” she told Newsweek. “Condos have also seen more severe price decreases over the last year-plus.”

In May, condos saw their pricing plunge nearly 13 percent from a year ago compared to single-family properties whose prices dropped by 4.5 percent. Overall, the median home price has dropped 11.2 percent to $439,000 in Miami, according to Realtor.com.

“There’s a lot more condo inventory available and those are going to inherently be more affordable, which is going to bring that median listing price down even if a single-family home buyer might be facing the same or higher prices,” Jones said.

The market in Florida is facing headwinds that the U.S. as a country is grappling with—elevated mortgage rates have made owning a home particularly challenging.

But the Sunshine State is also dealing with certain dynamics of its housing sector that emerged out of the pandemic.

During COVID, cities in Florida saw an influx of migrants from other parts of the country that escalated demand for homes, which helped push up prices.

That interest has waned in recent months and the supply of homes that came in is now waiting for buyers who are no longer in as high numbers as they once were, hitting prices along the way. Added to that is the challenge of high insurance costs that have gripped Florida amid increased frequency of climate change-related weather disruptions.

“In Florida, especially there was that boom in demand, really, really low inventory levels, really quick price growth. And so a lot of the prices in Florida are still relatively high,” Jones said. “When it’s no longer super affordable to purchase into Florida, you’re going to start asking those trade-off questions, right? ‘Okay, well, prices aren’t as low as they once were, is this still really worth it?'”

Buyers are rethinking whether it is worth investing in Florida with all those dynamics at play on top of high insurance costs.

“It feels very pressing right now, especially as we’re in the summer, of the unpredictability of climate and weather and how expensive it’s going to be to insure,” Jones added. “Then also how good of an investment it will be to have a property somewhere that is likely to face extreme heat, extreme wind, hurricanes, that sort of thing.”