As we enter into the 3rd quarter of 2020, Miami remains a buyers' market and investors need to capitalize on this advantage while it is still there. We will discuss the latest Miami real estate market trends and find out how they can affect the investors and homebuyers in the latter half of 2020. After getting hammered by the pandemic, the Miami and South Florida housing market bounced back in July. Out of five counties, only two of them saw a year-over-year decline in sales.
Sales in Miami-Dade & Broward counties declined by 6% and 0.7% respectively. The other three counties saw a significant year-over-year increase in sales—Palm Beach (+9.35%), Martin (42.6%), and St. Lucie (20.5%). The median sales price in the Greater Miami housing market which comprises of Broward, Miami-Dade, and Palm Beach counties increased by 5.5% to $385,000 while sales dropped by -11.6%.
According to Realtor.com, in July 2020, the Miami area was a balanced real estate market, which means there was a healthy balance of buyers and sellers in the market. Months Supply of Inventory was 4.3 in Miami-Dade County (July). Months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically 6.5 months is considered a balanced housing market but due to the ongoing crisis, the demand somehow meets the current supply.
Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The buyers in Miami have managed to hold good leverage in these negotiations in the past month. On average, they could buy homes for 96.95% of the asking price—3.05% below asking price on average in July 2020. A seller would always prefer scenarios that can yield a ratio of 100% or higher. The median list price of homes in Miami, FL was $380K, trending up 4.1% year-over-year.
The median listing price per square foot was $261. The median sale price was $346.5K. On average, homes in Miami, FL sell after 93 days on the market. The trend for median days on market in Miami, FL has gone down since last month, and slightly up since last year. More detailed Miami housing market trends and forecasts are given below.
Let’s discuss a bit about Miami and the metro area before discussing why you’d want to invest in its real estate market. Miami is a fairly walkable city in Miami-Dade County. Miami hits most people’s radar as a tourist destination, though it periodically hits the news when it looks like it may be hit by a hurricane. However, Miami is a large, thriving city with a strong housing market. Miami is home to just under half a million people.
However, the Miami housing market is far larger than that – it includes much of southeast Florida and more than five million people. That makes the Miami real estate market the seventh-largest in the U.S., and it is the second-largest housing market in the southeastern U.S. However, that isn’t reason enough to consider investing in the Miami real estate market.
Miami has a track record of being one of the best long term real estate investments through the last ten years. According to a report published by Zillow in Dec 2017, Miami was the country’s fourth most valuable housing market. Trailing only Los Angeles (total value of $2.7 trillion), New York (2.6 trillion), and Washington (996.7 trillion), the total value of Miami’s housing market is an estimated 864.2 billion, which represents a solid 4.7 percent increase year over year. With that kind of increase every year, just think of what would its valuation be after two years?
According to Neigborhoodscout.com's statistics, the Miami real estate appreciated 96.54% over the last ten years, which is an average annual home appreciation rate of 6.99%, putting Miami in the top 10% nationally for real estate appreciation. Their data show that during the latest twelve months, Miami's appreciation rate, at 5.34%, has been at or slightly above the national average. In the latest quarter, Miami's appreciation rate has been 0.30%.
If they remain steady, the annualized appreciation rate would be around 1.2%. In this article, we shall discuss some more important reasons why you may want to consider buying Miami investment properties in 2020. Let’s find out more about it.
Miami & South Florida Housing Market Trends & Prices 2020
We shall now discuss some of the latest real estate market trends in Miami such as median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region. In Miami-Dade, the housing affordability crisis is getting worse. According to the Miami Association of Realtors’ June 2018 report, median single-family home prices increased from $335,000 to $355,000 year-over-year; it was the 78th consecutive month of growth.
Existing condo median prices rose 2.1 percent, from $235,000 to $240,000. For renters, Miami’s greater downtown area is the place to be. Brickell, Downtown, and Midtown are some of the top three hottest areas in Miami-Dade right now for renters. For buyers, the top three hottest areas are Coral Gables, Miami Beach, and Coconut Grove. Budget-conscious home buyers should consider Homestead, Miami Shores, and Kendall. Investors will want to pay attention to the Design District. Miami Beach remains popular, but watch out for inflated prices.
And traffic has become one of the key factors when deciding where to live. For the fourth year in a row, Miami Beach was once again named the most overvalued neighborhood, with a median price per square foot price of $520, according to Zillow. Brickell clocked in second at $497 per square foot, while the luxury enclaves of Sunny Isles Beach ($554) and Key Biscayne ($753) tied for third.
Homestead, where the median square foot price is $140, was deemed the most undervalued neighborhood. Miami Shores ($338) came in second because its price is lower in other areas with comparable housing stock and quality of schools, such as Pinecrest and Coral Gables. North Miami Beach ($237), Little Havana ($254), and Kendall ($226) tied for third. For more details, you can read this report published in the Miami Herald.
Before the coronavirus pandemic went global, there was talk about Miami being overpriced. On the flip side, there was an over-supply of condos, since they were aimed at snowbirds and tourists. When all the tourists are gone, demand for hotels and tourist destinations collapsed. And many of the tourism-related jobs dried up with it, too.
Economic uncertainty has had a chilling effect on the Miami housing market, too. Redfin gives the Miami area a score of 27 out of 100, considering it not very competitive. Multiple offers are rare. As of this writing, the average property takes two and a half to three months to sell for four percent below its listing price.
“Hot” homes sell for their listing price in about a month. Ironically, this means the slowed down Miami housing market is closer to a steady-state position than on the decline. The South Florida housing market is still seeing appreciation. The average sale price for homes hit roughly 350,000 dollars in July 2020. This is a seven percent increase year over year. The price per square foot hit 230 dollars, an 8.5 percent increase.
In March 2020, the Greater Miami housing market was exceptionally strong with limited supply and strong demand, according to Miami Realtors. Months Supply of Single Family homes decreased by 16.7% to 5.5 – Seller's Market. Months Supply of Condo/Townhomes decreased by 12% to 12.5 – Buyer's Market.
Despite Social Distancing Orders, Sales in March;
- Increased .43%
- Luxury rose 17.1% for SF & 46.8% for Condos/Townhomes
- 22.8% Increase – Single-Family $400K-$600K
- 44.2% Increase – Condos/Townhomes $300K to $400K
- Single Family Homes – Decreased 12%
- Condo/Townhomes – Decreased 9.5%
- Single Family Median Price = $382,750 (+9%)
- Condos/Townhomes Median Price = $269,000 (+9.5%)
Impact of COVID-19 on The Greater Miami Housing Market
The Greater Miami area is currently a buyer's real estate market. In May 2020, Miami-Fort Lauderdale-West Palm Beach MSA (Broward, Miami-Dade, and Palm Beach counties) experienced a 48.0% y-o-y drop in sales of single-family homes. The median sales prices increased by 2.1% to $372,500. Year-to-Date sales dropped by -2.9%.
According to the national real estate brokerage Redfin, the Miami metro area had about an 8-month supply of homes for sale as of June 2020. That was quite higher than most other metros in the U.S. In a buyer's real estate market, homes tend to stay on the market longer before going under contract. Sellers become more anxious, often lowering their sale prices to attract buyers.
The entire South Florida housing market — and Miami in particular — saw a decline in sales over the past few months due to the COVID-19 pandemic. In June, a report released by the Miami Associaltion of Realtors said that they expect an increase in sales in the coming months due to falling mortgage interest rates. They're also seeing an influx of refugees from high-tax states. For example, thousands of high-income earners are relocating from New York to Florida. The realtor report stated that there was a 6.1 percent annual growth in overall sales.
The single-family market saw a roughly eight percent decline in sales year-over-year, but that includes months where it was very difficult to show off a home. Condo sales fell roughly four percent. However, the overall number of homes sold was only down one percent. And the average home price continued to rise albeit at a slower rate. This means single-family homes in the Miami real estate market have risen for more than ninety months consecutively, virus, or no virus.
This is where the massive decline in sales in the luxury market has pulled down the stats for the South Florida real estate market as a whole. Fortunately, there hasn't been a major change in the rate of distressed home sellers. Around 6.5 percent of close sales were distressed sales. That's an increase of a third of a percentage point. Yet total Miami distressed sales and short sales fell. This may be a side benefit of having up to a fifth of housing stock empty. People may be holding onto dream retirement properties, or in the case of the luxury market, dumping their other residence and moving into their Miami condo.
Here is the South Florida Housing Market Report for July released by the Miami Association of Realtors. According to the data released by the Miami Association of Realtors, the number of closed sales for single-family homes dropped by nearly 6% in July 2020 compared to a year earlier. That’s for Miami-Dade County, specifically.
Other counties in the region also experienced a drop in home sales in July of this year. During that same 12-month reporting period, closed sales fell by 0.70% in Broward County. On the other hand, closed sales increased by 9.4% in Palm Beach County, 42.6% in Martin County, and 20.5% in St. Lucie County.
Miami-Dade County Housing Market Report
|Miami-Dade County Housing Market Summary||July 2020||Jul-19||Percent Change Year-over-Year|
|Paid in Cash||186||233||-20.2%|
|Median Sale Price||$4,10,000||$3,72,000||10.2%|
|Average Sale Price||$6,78,706||$6,34,130||7.0%|
|Dollar Volume||$810.4 Million||$805.3 Million||0.6%|
|Median Percent of Original List Price Received||95.9%||95.5%||0.4%|
|Median Time to Contract||46 Days||52 Days||-11.5%|
|Median Time to Sale||92 Days||98 Days||-6.1%|
|New Pending Sales||1,692||1,367||23.8%|
|Inventory (Active Listings)||4,409||6,489||-32.1%|
|Months Supply of Inventory||4.3||6.0||-28.3%|
Data by Miamirealtors.com
Broward County County Housing Market Report
|Broward County Housing Market Summary||July 2020||July 2019||Percent Change Year-over-Year|
|Paid in Cash||244||284||-14.1%|
|Median Sale Price||$4,00,000||$3,80,000||5.3%|
|Average Sale Price||$5,11,102||$4,74,793||7.6%|
|Dollar Volume||$841.3 Million||$775.8 Million||8.4%|
|Med.Pct. of Orig. List Price Received||96.9%||96.0%||0.9%|
|Median Time to Contract||32 Days||43 Days||-25.6%|
|Median Time to Sale||73 Days||85 Days||-14.1%|
|New Pending Sales||2,093||1,682||24.4%|
|Inventory (Active Listings)||3,725||5,562||-33.0%|
|Months Supply of Inventory||3.1||4.2||-26.2%|
Data by Miamirealtors.com
Miami Real Estate Market Predictions & Forecast 2020 – 2021
What are the Miami real estate market predictions for 2020? Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. Since 2012, the median home price in Miami has appreciated by a whopping 81.7% from $204,000 to $370,738.
The Zillow Buyer-Seller Index (BSI) shows that Miami is currently a cool buyer’s real estate market. This is computed monthly. According to their index, there exists a general lack of demand in Miami, and homes can linger on the market longer and ultimately sell for less, putting negotiating power in the hands of buyers. In other words, based on the last month’s key housing market indicators, current supply is exceeding the demand, giving buyers an advantage over sellers in price negotiations. There are more homes for sale than there are active buyers in the marketplace.
Miami median home values have gone up by 1.7% over the past year and are currently holding at $370,738 (Zillow Home Value Index). The latest Miami real estate market forecast is that the home prices may fall by 2.1% – in the next twelve months. It may be perhaps due to COVID-10 that has led to a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. That's how the prices remain flat or drop.
Here is a short and crisp Miami housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Miami is 77% and it is predicting a positive trend. LittleBigHomes.com estimates that the probability of rising home prices in Miami is 77% during this period. If this price forecast is correct, the Miami home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
The historical change in home prices for Miami-Miami Beach-Kendall, FL is shown below for the three-time periods. The Miami Home Price Index has increased for the last 26 consecutive quarters (data up to 3rd Quarter, 2018). The highest annual change in the value of houses in the Miami Real Estate Market was 28% in the twelve months ended with the 4th Quarter of 2005. The worst annual change in home values in the Miami Market was -29% in the twelve months ended with the 4th Quarter of 2008.
The highest growth in home values in the Miami Real Estate Market over three years was 83% in the three years ended with the 3rd Quarter of 2006. The worst performance over three years in the Miami Market was -44% in the three years ended with the 2nd Quarter of 2010. For the upcoming updates, you can visit LittleBigHomes.com.
|Time Period||Greater Miami Real Estate Appreciation|
|Last 5 Years||59%|
|Last 10 Years||31%|
|Last 20 Years||194%|
The question now is what happens moving forward. These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is quite evident that the pandemic had a major impact on home sales in the Miami and South Florida real estate market due to the sharp reduction in property showings. The pandemic, however, has not had much impact on prices yet.
Economist Ken Johnson found that homes in the Tri-County area are overpriced by 20 percent. This means that properties are over-valued by the highest level in eight years. However, this doesn't mean that the coronavirus crisis will cause the South Florida housing market to crash. First, the Miami housing market was 60 percent overpriced during the 2008-2009 housing market collapse. Twenty percent is easily corrected without wiping out a lot of people financially.
Second, the area offers stronger average incomes than it did twelve years ago. More people can afford their homes even if their incomes fall ten to thirty percent or can continue to make payments if one adult in the household is unemployed. Third, low-interest rates will bolster the real estate market. Many people can refinance their home loans assuming they aren't taking loan forbearance.
Furthermore, the greater Miami metro area is in a stronger position than the last financial crisis. First, there is no subprime mortgage crisis this time. Second, the Miami real estate market had record low delinquencies before the coronavirus pandemic exploded. This will prevent a glut of houses for sale that will depress the housing market.
Another contributing factor is the massive rental market in the Miami area. More than two-thirds of people in the area rent instead of own. For comparison, roughly two-thirds of Americans own their home. This creates massive pent up demand for local real estate. We can expect the South Florida housing market to be bolstered by would-be homeowners who have jobs to take advantage of declining real estate prices.
With an average monthly rent of 2400 dollars a month in Miami and 2000 in the Miami suburbs, those who can land a house for that monthly payment and afford it will take it. This is why homes in the 300,000 to 400,000 are a seller's market. There hasn't been much inventory growth in this price range, which includes the median price point for homes in the Miami real estate market. Builders were too busy building condos, apartment buildings, and luxury homes, instead.
This doesn't mean the housing market isn't going to take a hit. The luxury housing market is expected to see a significant decline. In the Miami housing market, this includes all homes over a million dollars. They're the ones that are the most overpriced. And they're the ones seeing the greatest drop off in demand. If you're afraid to travel due to the coronavirus or cannot do so due to travel restrictions, there's no way you'd buy a luxury condo or beach house. Note that this is a continuation of the high-end Miami real estate market that's been going on for several years.
Where does this leave us? The Miami real estate market had already started to cool, resulting in a nearly two percent year-over-year appreciation rate up through the early months of the coronavirus crisis. Due to a decline in purchases and the long-term economic impact of the government-mandated shutdown, home prices are expected to fall just two percent by the end of 2020. Home prices are expected to remain at that same level because the demand for housing will match supply.
Home prices will remain steady for a variety of reasons. The condo glut has already caused new listings of condos to fall, and new construction of them is at a standstill. There is an estimated thirteen-month supply of condos relative to demand. The supply of single-family houses is slowly growing due to high demand. This will keep housing prices slowly rising for the foreseeable future.
The South Florida housing market is already showing signs of a potential rebound. For example, new pending sales are increasing year over year. New pending sales of single-family detached homes in June were up double digits due to brisk demand and limited supply. The new pending sales of condos were up by nearly a third. The biggest impact of the Chinese coronavirus has been closing time.
The average closing increased from 49 days to 63 days. Part of that was due to the need to maintain social distancing during inspections, walk-throughs, and inspections. Mortgage applications are another indicator of future sales. The greater Miami area is seeing mortgage applications increase five percent a week. Note that this is separate from the massive surge in mortgage refinancing.
Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Miami in 2020 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance.
Miami Real Estate Investment: Is Miami a Good Place To Invest?
Successfully investing in real estate — whether you are in Miami or anywhere else in the world — is all about correctly timing the market. Knowing when to enter into the real estate market can often be a bit of a challenge. Should you invest in Miami real estate? Is Miami a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Miami is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2021.
|Top Reasons To Invest In The Miami Real Estate Market?|
Although, this article alone is not a comprehensive source to make a final investment decision for Miami we have collected ten evidence-based positive things for those who are keen to invest in the Miami real estate market. Investing in Miami real estate will fetch you good returns in the long term as the home prices in Miami have been trending up year-over-year. Let’s now discuss the state of the Miami real estate market, which can help investors who are keen to buy an investment property in this city.
Miami is a Strong International Market
In 2011, nearly a third of residents were foreign-born. However, about half of those become citizens, so we can say that Miami is simply considered attractive to immigrants. However, the Miami housing market is unusual in the number of foreigners buying homes here. Russians, Brazilians, Argentines, Turks, Chinese and British buyers are buying up properties here at a far higher rate than would be expected. Some see the property purchases as a safe investment, while others intend to use the beachside condos as vacation properties.
A few bought homes in Miami to flee to in case their home countries became untenable, which explains the large Venezuelan ex-pat community in Miami. Many tourists come to the beach, and many people want to live there, as well. Miami’s beaches are made all the more attractive by the year-round subtropical weather. This helps explain why Miami-Dade’s population is growing around 2% a year while south Florida’s population overall has been stagnant. It is considered the fifth fastest-growing region in the U.S.
In 2018, 54 Percent of Florida’s Foreign Buyers were in Miami Metro Region. In July 2019, Miami-Fort Lauderdale-W. Palm Beach was ranked #1 by Realtor.com among the top US Markets for International Traffic. It is #1 among the major U.S. Destinations of Foreign Buyers. Florida has been #1 for 10 Years for Top US Markets for International Traffic. The Miami real estate market does present an opportunity for those who want to cater to tourists.
The Port of Miami is known as the Cruise Capital of the World since it is the top cruise passenger port in the world. Landlords can rent to tourists who want to stay for a week in Miami before flying home or simply want to enjoy Miami’s beaches, cultural activities, and sports teams. According to the Wall Street Journal, a $350,000 property can be rented out for $2500 per month. That’s a fair ROI, and you could easily rent out a vacation condo when you aren’t using it yourself.
The Geographic Constraints
Many of the world’s fastest appreciating real estate markets are attracting people coming for work and quality of life, but they cannot expand the housing supply to meet demand. San Francisco is surrounded by water on three sides, and they make things worse by limiting the height of buildings, so they can’t build up the way NYC has. In Colorado and Utah, a mix of federal parklands and vertical mountains limit where developers can build houses.
We’ve already mentioned that Miami is on the water. Miami has experienced a spurt in high rise construction in downtown, giving it the third-highest skyline in the U.S, but other areas limit it so that high rises don’t block the view of the water. However, that hasn’t prevented the Miami real estate market from becoming the sixth densest housing market in the U.S overall.
There’s an interesting factor to consider in the Florida housing market, and that’s the massive retiree population. Many older people move to Florida for the mild weather, and they’re rather immune to housing price fluctuations. Older people who already live here stay in their homes. This results in fewer turnovers in the Miami real estate market, limiting supply for would-be buyers.
That explains why Tampa and Coral remain over-priced markets though jobs aren’t as plentiful there. Retirees who do leave the state periodically tend to keep their Florida home as a second residence instead of selling it. The Gulf Coast is more of a vacation spot than a retirement enclave, so there’s less competition for limited housing stock.
Miami's Economy Development and Job Growth
Many people move to Miami for work. Miami is the largest urban economy in Florida, and it has the 12th largest GDP in the U.S. The World Cities Study Group classified Miami as an alpha city based on the level of business activity, human capital, and cultural activity. The unemployment rate in Miami hovers around 4% (before COVID-19); it is currently in line with the national average but often below it. Only Orlando has a better job market.
Miami-Dade County is a global tourist destination. Since 2011, overnight visitors to Miami-Dade have increased by 20 percent, and hotel room nights sold have gone up 22 percent. In 2019, Greater Miami welcomed 24.3 million visitors, for an increase of 4.6 percent over 2018. Travel and tourism fueled a record-breaking 146,700 jobs in 2019. While MIA, PortMiami, and tourism are driving forces in the local economy, Miami-Dade has a vibrant entrepreneurial spirit among small businesses.
The Kauffman Foundation regularly ranks Miami as the top U.S. city for startup activity. For those residents in the County who are homeowners, life has also improved dramatically in the past eight years. County's government's one promising project on the drawing board is the Redland Market Village, which will create a vibrant downtown destination in south Dade. This project will bring 2,600 jobs and $351 million to the community during construction. Once complete, it will generate an annual economic impact of $40 million, and more than 400 new jobs, in addition to the 800 currently there.
According to a new report from the University of Central Florida’s Institute for Economic Forecasting, Florida’s economy is expected to contract by 6% year-on-year in 2020 — but will bounce back with growth of 7.6% in 2021. By comparison, the Conference Board, the nonprofit group of economists that calls U.S. recessions, predicts 4.9 percent contraction for the American economy in 2020 and a 2% growth recovery in 2021.
Florida retail jobs are also predicted to snap back by 10% in 2021 after declining by 6.1% in 2020. For Miami-Dade, the recovery will be led by professional and business services employment, which is expected to average 3.7% growth in 2023, followed by education and health services at 2.9%. Manufacturing is forecast to decline by 2.8%.
Miami's Massive Rental Market
Two-thirds of Miami residents rent, a rental rate rivaling that of New York City. This is partially due to the number of people working in seasonal and temporary jobs in the tourism business. It is partially due to the limited housing supply relative to demand. And it is partially due to the high cost of housing, even inland, relative to local wages. This is leading many investors in the Miami real estate market to buy single-family homes to be carved up into multiple units, each one rented out individually.
As the largest city in Florida, it would end up with multiple large universities for that reason alone. However, Miami’s international appeal and unique position have made it an education and research hub, resulting in the creation of institutions like Florida International University. There are almost forty colleges and universities within forty miles of Miami, hosting over 350,000 students. Ironically, Miami University isn’t among them – that’s in Ohio. The University of Miami, though, is located in Miami and enrolls more than 17,000 students.
Latest Rental Market Statistics: The average rent for an apartment in Miami is $1,702, a 2% increase compared to the previous year. According to RENTCafe, 45% of the households in Miami are renter-occupied, which is a significant population. About 40% of the apartments fall in the range of $1,500 or less and 37% fall between $1,501-$2,000. As a rental property investor, it should be on your list of due diligence. Do the math and find out the best neighborhood & property that suits your investment goals.
The average size for a Miami, FL apartment is 891 square feet with studio apartments being the smallest and most affordable. 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.
These are some of the most affordable neighborhoods where the rent prices are below the Miami average rent:
- Palmer Lake – Mia Station, where the average rent goes for $909/month.
- Mays Gardens, where renters pay $1,024/mo on average.
- Brandon woods, where the average rent goes for $1,153/mo.
- Cantisano, where the average rent goes for $1,153/mo.
- Coral Woods, where the average rent goes for $1,153/mo.
- Dixie Heights Gardens, where the average rent goes for $1,153.
According to RentJungle, as of July 2020, the average rent for an apartment in Miami, FL is $2257 which is a 1.51% increase from last year when the average rent was $2223, and a 1.24% increase from last month when the average rent was $2229.
- One-bedroom apartments in Miami rent for $1906 a month on average (a 0.21% increase from last year).
- Two-bedroom apartment rents average $2435 (a 1.15% decrease from last year).
- The average apartment rent over the prior 6 months in Miami has decreased by $34 (-1.5%).
- One-bedroom units have decreased by $25 (-1.3%).
- Two-bedroom apartments have decreased by $67 (-2.7%).
The Strong ROI for Landlords
Investing in the Miami real estate market can give you strong returns. The high demand for properties in southeastern Florida relative to demand limits the ability of people to buy, creating a large pool of renters. Miami ranked second in the nation for the most cost-burdened renters in the country, paying more than half of their income in rent.
Rents aren’t as high as they are elsewhere in the country, but given the lower property values than markets like Silicon Valley or NYC real estate market, it is a good ROI. For example, the median home price is around $350,000, while the median rent is $1900 a month. A $1900 a month rent would be considered a burden for a household earning $70,000 a year, while median incomes in the area are $50,000.
Whether you’re renting to students, low-income workers, or snowbirds, potential investors in the Miami housing market will be glad to know this is a landlord-friendly market. Florida doesn’t have laws on rent control. Security deposits aren’t capped, and you can start eviction is the rent is three days late. Damage to the property requires a seven-day conditional quit notice, while repeated lease violations allow for a seven-day unconditional notice.
Miami Investment Properties: Where To Buy?
In any real estate investment, investment, cash flow is gold. The Miami real estate market offers diverse opportunities to real estate investors, allowing you to choose which rental markets you want to cater to and profit from. Good cash flow from Miami investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding the best investment property in Miami in a growing neighborhood would be key to your success. As with any real estate purchase, act wisely. Evaluate the specifics of the Miami real estate market at the time you intend to purchase. When looking for the best real estate investments in Miami, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.
There are 35 neighborhoods in Miami. Coconut Grove has a median listing price of $949K (Realtor.com), making it the most expensive neighborhood. Le Jeune Gardens is the most affordable neighborhood, with a median listing price of $181.9K. Popular neighborhoods in Miami include Brickell, Kendall, Aventura, Downtown Miami, Little Haiti, Mid Beach, Edgewater, Downtown, Coconut Grove, Brickell, Wynwood, Miami Springs, South Point, Miami Shores, Hialeah, El Portal, Santa Clara, and South Beach.
Here are some of the best neighborhoods within the Miami Beach area where you can buy investment properties.
Brickell is one of the hottest affordable areas in Miami. It is located on the Miami South Channel, thus it is on the waterfront. Yet the average home here sells for around four hundred thousand dollars. This is a relative bargain compared to incredibly expensive neighborhoods like Coconut grove located a few miles to the south. Brickell is located south of downtown Miami, putting it in easy reach of that massive job market.
This is a densely built-up area, so you pay around 480 dollars per square foot. This is somewhat higher than the Miami average. On the other hand, the median rent is 2600 dollars a month, somewhat higher than the 2450 average for the Miami-Dade area. Brickell Key charges roughly 2600 dollars a month, too.
Liberty City is a few blocks from Biscayne Bay. Highway 195 forms its southern border, while Highway 95 is its eastern border. Being so close to major highways is part of the reason why the average home here costs a quarter-million dollars. The relatively cheap south Florida real estate explains why this is a warm housing market despite the chill caused by the coronavirus. Home prices here have appreciated almost ten percent year over year, and they're expected to remain unchanged through 2021.
Overtown is another neighborhood close that's not quite on the water's edge. It is bisected by Highway 395 and I-95. This neighborhood is popular with medical professionals because it is dominated by the Miami-Dade College Medical campus and several hospitals. The average home here costs around a quarter-million dollars.
Before the coronavirus crisis, property values had appreciated a healthy five percent year over year. Projected home values are unchanged for the rest of 2020 and into 2021. Residents are attracted to the affordable property, though property owners may appreciate the many people moving here due to the 1650 dollar a month rent.
Here are the ten neighborhoods in Miami having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
- N Miami Ave / NW 36th St
- Miami Dade College / Biscayne Blvd
- NW 2nd Ave / NW 24th St
- E Flagler St / NE 2nd Ave
- City Center
- SE 2nd Ave / SE 1st St
- N Miami Ave / NE 14th St
- S Miami Ave / SW 1st St
- Buena Vista
- NW 7th Ave / NW 17th St
Tampa is another great real estate investment market in Central Florida. It growing steadily, prices are still low and properties have a good chance for a strong appreciation in the coming years. With a population of more than 4 million, the Greater Tampa Bay area includes the Tampa and Sarasota metro areas. It is not only an attractive metropolitan area but is also one of the most frequently visited tourist destinations. It is one of the hottest real estate markets for rental homes in the nation.
There’s a tremendous amount of pent-up demand for entry-level single-family homes. In the past ten years, the annual real estate appreciation rate has amounted to 5.44% which puts Tampa in the top 10% nationally for real estate appreciation. There is less than 2-month of the available inventory in the entire Tampa metro area – down almost 21.4% over last year. This is one of the key factors in rising home prices.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Miami.
Consult with one of the investment counselors who can help build you a custom portfolio of Miami investment properties. Depending upon the availability, we can help you to find “Cash-Flow Rental Properties” located in some of the best neighborhoods of Miami.
Not just limited to Miami or Florida but you can also invest in some of the hottest real estate markets for rental properties in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Miami turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Is It The Right Time To Invest In Real Estate? – The national homeownership rate is on the decline for the first time since 2017. As demographics change and baby boomers retire, you’re seeing Millennials who may not be ready to buy houses. In 2018, Millennials made up about 22 percent of the population in the United States. They’re choosing to rent over buying a single-family home or an apartment. Rising home prices and shortage of starter homes have not left Millennials many choices but to delay homeownership. Moreover, it's even harder to take out a mortgage for those who have student loan debt.
Please do not make any real estate or financial decisions based solely on the information found within this article. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Miami real estate. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.
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