By Gay Cororaton, MIAMI REALTORS® Chief Economist
MIAMI REALTORS® expects Southeast Florida’s single-family home sales to continue to perform strong in 2025, prices to continue to appreciate, and market conditions to become more competitive as mortgage rates continue to head downwards to 5% by the end of 2025. Here are our key projections:
- Mortgage rates will decline to 6% by the end of 2024 and 5% by the end of 2025 as inflation continues to sustainably move towards 2%.
Based on data available as of September 2024, the Miami Association of REALTORS® (MIAMI) projects that the 30-year fixed mortgage rate will decline to 6% by the end of 2024 and 5% at the end of 2025, revised downwards from the June 2024 projections (6%, 5.75% respectively). The 10-year Treasury bond yield, a risk-free yield that is a benchmark for mortgage rates, is forecasted to end at 3.8% in 2024 and 3.0% at the end of 2025.
- Existing home sales will rebound 6% in 2025, driven by single-family home sales while condominium sales remain flat.
With mortgage rates expected to hit 5% by year-end in 2025, MIAMI projects existing home sales will increase 6%, a turnaround from the projected 6% decline in 2024. Single-family sales will drive growth with a projected increase of 10%, a rebound from the projected 1% decline in 2024. Year-to-date through August 2024, single-family sales were lower from one year ago in all counties except in Miami-Dade where sales rose: Miami-Dade (+3.2%), Broward (-1.2%), Palm Beach (-3.4%), Martin (-1.5%), and St. Lucie (-6.2%).
Condominium or townhome sales are projected to be essentially flat with transactions up 0.7% in 2025 (0% in the June 2024 forecast), with downside risk due to the condominium building safety regulations (SB 4-D) that could cause financial burden for condo owners. For 2024, condominium/townhome sales are projected to decline 11% given the year-to-date declines through August 2024 in all counties: Miami-Dade (-9.4%), Broward (-11.0%), Palm Beach (-15.0%), Martin (-6.9%), and St. Lucie (-6.2%).
- The median single-family sales prices will continue to increase by 6% in 2025 while condominium sales prices will remain flat.
As demand rises in 2024 due to improving affordability and sustained job growth, the median single-family sales price in Southeast Florida is projected to increase 6% in 2025 to $643,000, sustaining the 7% forecasted growth in 2024.
In the condominium market, the median sales price in Southeast Florida is projected to remain essentially unchanged in 2024 and in 2025, at $330,200. As of August 2024, condominium median sales prices have remained essentially unchanged across all counties: Miami-Dade (-0.24%), Broward (0.0%), Palm Beach (+3.3%), Martin (-0.34%), and St. Lucie (+1.6%).
Rising share of million-dollar homes and cash buyers
The median sales prices have increased in part due to the rising share of million-dollar home sales and the higher share of cash buyers.4 The price increase is being driven by economic fundamentals of strong job growth and sustained migration of high-net worth/cash buyers who are living/moving to Southeast Florida for a variety of reasons (.e.g, lower real estate taxes, less crime, more job opportunities, lifestyle).
As of August 2022, the million-dollar sales accounted for 22% of single-family sales in Miami-Dade and in Palm Beach County (both 8% in January 2019); 16% in Broward County (6% in January 2019); and 19% in Martin County (12% in January 2019). Million-dollar homes account for less than 2% of single-family sales in St. Lucie County.
Cash buyers have increasingly accounted for a higher share of the million-dollar condominium market. In Miami-Dade, all-cash sales accounted for an average of 73% of million-dollar condominium sales during January-August 2024 (65% in 2019), 75% in Broward (70% in 2019), 88% in Palm Beach County (83% in 2019), and 89% in Martin County (95% in 2019).
- Single-family market conditions will become more competitive with a seller’s market prevailing.
With rising demand, the single-family market is projected to become more competitive in 2025 and will remain a seller’s market with months’ supply hovering at the range of 4 to 5 months. As of August 2024, single-family months’ supply was below 5 months in all counties: Miami-Dade (4.7), Broward (4.5), Palm Beach (4.7), Martin (4.4), and St. Lucie (4.7).
- Southeast Florida’s strong job growth is poised to continue outpacing the national rate.
Southeast Florida’s economy is poised to strengthen in 2025 as mortgage rates decline and as business confidence continues to ascend given the area’s strong economic and demographic fundamentals.
With a stronger economy in 2025 and sustained business confidence in the Southeast Florida economy, MIAMI projects Southeast Florida’s total employment (including self-employed) to increase to 2.4% in 2025 from 1.0% in 2024, an increase of 80,000 jobs. These figures are essentially unchanged from the June 2024 projection.
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