By Gay Cororaton, MIAMI REALTORS® Chief Economist
While properties are taking a bit longer to sell compared to the frenzied pace in 2021-2022, South properties are still selling in the fastest time compared to the pre-pandemic years with far fewer homes on the market across all price segments. South Florida’s housing market is likely to remain highly competitive for the remainder of 2023 given the area’s job growth momentum, especially in the tech and finance industry. The higher cost of renting could also incentivize renter households able to afford a home purchase to own rather than to rent.
Properties sold faster compared to 2019 across all price points. In the counties of Miami-Dade, Broward, Palm Beach, and Martin, single-family properties went under contract with a median of 27 to 33 days in April 2023 compared to 47 to 58 days in April 2019.
Single-family homes that sold for $300,000 to $399,000 went under contract in the quickest time, with a median of 18 to 23 days in the four counties compared to 41 to 52 days in April 2019. Properties go under contract with little inventory on the market. Active listings in that price range has dried up, down about 82% in Miami-Dade, Broward, and Palm Beach and with active listings making up just 6% of the active listings compared to about 20% in April 2019. Months’ supply is just at 1.2 to 1.5 months.
Single-family homes that sold for $400,000 to $599,999 went under contract with a median of 24 to 30 days in Miami-Dade, Broward, and Palm Beach compared to 42 to 66 days in April 2019. In Martin County, properties also sold more quickly with a median of 40 days from 46 days in 2019. Active listings at this price point were down 62% to 75% in the four counties in April 2023 compared to 2019. Months’ supply is in the range of 1.5 to 1.8 months. .
In the $600,000 to $999,999 market, properties sold within 28 to 33 days in the four counties compared to 59 to 105 days in April 2019. Active listings have also fallen in this price segment although not as sharply, down by 17% to 36% across the four counties. Month’s supply’ is still essentially tight at 2.6 to 3.3 days.
Even for the pricier $1 million or over homes, homes on the market went under contract more quickly with a median of 31 to 62 days from a range of 135 to 194 days in April 2019. Even in this high-end market, there were 7% to 20% fewer active listings on the market as of April 2023 compared to the levels in April 2019. Cash buyers, who are immune to the rise in mortgage rates, make up over half of buyers, with a 61% share of single-family home sales and a 74% share of condo/townhome sales. With the smaller decline of active listings in this market segment, prices of homes listed at $1 million or over now make up 40% to 50% of active listings in the four counties, up from 20% to 27% in April 2019. Months’ supply is the range of 6.6 to 8.7 months compared to 15 to 23 months in April 2019. A months’ supply of 12 to 24 months’ supply is normal for this price segment.
South Florida’s Housing Market Likely to Remain Highly Competitive
South Florida’s housing market is likely to remain highly competitive for the remainder of 2023 given the area’s job growth momentum, especially in the tech and finance industry. The higher cost of renting could also incentivize renter households able to afford a home purchase to own rather than to rent.
The latest state-level job openings data show that Florida led all states with the largest increase in job openings in March from February, with 55,000 more new job openings. This is an important indicator of the strength of Florida’s job market because nationally, the number of job openings is on the decline (-384,000). California saw a cutback in job openings (-74,000) as well as Texas (-52,000) while New York’s job openings rose by a smaller amount (11,000).
Tech, finance, and construction jobs were the fastest growing private sector jobs as of the latest available data in 2022 Q3 reported by the Bureau of Labor Statistics Quarterly Census of Employment and Wages. In Miami-Dade, information industry jobs (includes “tech” jobs) rose at the fastest pace from one year ago (13%), financial industry jobs in Broward (8.6%), construction jobs in Palm Beach (7.2%), and information industry jobs in Martin ( 16.2%). Several tech, finance, and legal companies like Citadel[1], Microsoft[2], and Kirkland[3] have relocated their headquarters, set up hubs, or expanded operations in Miami-Dade.
Some renter households – particularly among those renting a single-family home in Miami-Dade– may decide to own than rent due to the higher cost of rent without the benefit of wealth creation from homeownership.
According to RentalBeast.com, the median asking rent on a 3-bedroom single-family home in Miami-Dade in April 2023 was $3,900. This is higher than the mortgage payment of $3,189 on a single-family home purchased at the median price of $600,000 with a 10% downpayment and a mortgage rate of 6.34%. Moreover, with tight housing supply, home prices are more likely to continue to appreciate rather than decline. Single-family home prices are currently rising in Miami-Dade at 6.2%.
As of 2021, there were 97,027 renter households in Miami-Dade, Broward, Palm Beach, and Martin with an income of $100,000 to $149,000, or 10.5% of 922,646 renter households.[4] Another 60,601 renter households with household incomes of $150,00 or more, or 6.5% of all renter households.
[1] Ken Griffin’s Citadel moving to Miami from Chicago (nypost.com)
[2] Microsoft to Open Regional Hub, Latin American Offices in Miami – NBC 6 South Florida (nbcmiami.com)
[3] Kirkland inks office lease in expanding Miami legal market | Reuters
[4] US Census Bureau, 2021 American Community Survey
