Significant Growth Trend in Miami Home Prices Expected to Continue
The real estate market in Miami, Florida, has exhibited an incredible streak of sustained growth over the past decade, despite various shocks to the national market, including the COVID-19 pandemic and associated financial crisis, recent inflationary pressure, and the ongoing period of high interest rates. The Miami real estate market has outpaced the national average and many other “hot” markets around the country, and several remarkable statistics bear out this growth.
A Decade of Rapidly Increasing Property Valuation
Between 2013 and 2023, the median home price in Miami-Dade, Broward, and Palm Beach Countries nearly tripled, with the average home gaining $340,000 in value in that time. This explosive growth is also apparent when zeroing in on the years around the COVID-19 pandemic, with the five-year period from 2018 to 2023 witnessing 64 percent growth in median home price and an average increase in home value of $220,000.
A handful of popular, high-value communities in the area have seen even greater increases than the regional average. For example, Palm Beach has seen a staggering $6 million increase in average home value over the past decade, with Miami Beach not far behind at $2.5 million. In Miami itself, home values increased by an average of $400,000 between Q1 2013 and Q1 2023.
This sustained, rapid growth has continued in the Miami area over the past year. As of April 2024, the price of a home in Miami had increased by 8.7 percent in the previous 12 months, with the median price of a home in Miami now costing $625,000. Despite this rapidly increasing price point, average time on the market for available homes has held relatively stable at 69 days, compared to 68 days a year ago. That said, sales volume has decreased somewhat in the past year. In April 2024, 583 homes were sold in Miami, compared to 634 in April of 2023. This reduction represents an approximately 8 percent decline.
Real Estate Market Growth Being Fueled by Migration
Miami has long been a popular destination for Americans from large cities—particularly on the East Coast—looking to relocate or buy homes. This trend has continued in recent years, with 3 percent of all prospective homebuyers in the US considering a move to Miami. At the same time, the ongoing wealth migration into southern Florida continues to drive this trend, with the number of million-dollar single-family home sales continuing to rise. At the same time, Florida as a whole has remained a popular relocation destination, with 153,347 drivers licenses transferred into Florida from out of state in 2023, more than an 8 percent increase over 2022. Common sources of incoming homebuyers include California, New York, and New Jersey.
These migration trends are expected to continue in the short- and mid-term, as Florida’s strong local economy, idyllic weather, and continued status as a desired destination for retirees and families relocating from oversees will likely result in a sustained influx of new residents and homeowners
Other Factors Driving Price Increases Expected to Persist into the Future
The escalating prices of homes in the Miami area are being driven by a number of other factors, as well. These include foreign investment, a relative lack of inventory, an ongoing development boom, and a robust rental market. One of the biggest factors, of course, is Florida’s long-standing reputation for having a high quality of life, coveted beach access, and an appealing climate without harsh winters.
The overall outlook for the real estate market in Miami is positive, with increases in valuation and market growth expected to continue. While it remains to be seen if the unprecedented rate of growth over the past decade can be sustained, most experts agree that the market will continue to heat up at an elevated rate compared to the national average. While this is a concern for those looking to relocate to the Miami in the near future, it is a boon for current homeowners, active investors, and the local economy as a whole.
Even those looking to purchase homes in the next year can do so with relative confidence, despite buying in at historic highs. Short of some unforeseen, widespread crisis that drastically impacts the global economy or impacts the ability of people to move to the area, prices should continue to rise at a rate that largely outpaces most alternative investments. Whether homebuyers are looking at Miami real estate as a means to a new home or a way to invest and grow their portfolio, homes in Miami appear to be a solid bet.
With summer here and beach season kicking into high gear, it will be interesting to see how this regional growth continues to develop over the next few months. Considering recent historical trends, it shouldn’t come as a surprise if Miami real estate has appreciated by a healthy factor this time next year.
