The year 2023 might not be particularly favourable for Florida’s real estate sector, especially in Miami-Dade County. Experts believe that inflation, growing mortgage rates, and a shortage of supply in the market may cause a sharp drop in housing sales.
The Association of Florida Realtors believes that the state’s residential property market will soon return to a more typical condition with a balanced demand and supply, like in 2018-2019. The price growth will slow down, and the consumer activity will decline as a consequence.
Dr. Brad O’Connor, Chief Economist at the Association, notes that the demand for housing will remain high, but many potential buyers will not be able to fulfil their intentions because of poor financial conditions.
On the other hand, there still won’t be enough homes listed for sale to satisfy the demand. O’Connor named several factors limiting the construction of new properties and the sale of existing ones. These include a shortage of labour resources, materials, and land; developers’ concerns; and homeowners’ reluctance to part with their homes and purchase more expensive properties.
Miami-Dade County will be among those particularly affected by these circumstances because of the great share of foreign buyers whose activity declined due to immigration restrictions and the pandemic. The economic and political uncertainty also diminishes the appeal of luxurious homes. In December 2022, the median selling price of residences in Miami-Dade reduced by 2% year-on-year.
Some analysts believe that the decline will be particularly apparent in the luxury housing segment. In 2023, the value of purchased properties is forecast to reduce by 25% across the market and by even more in the premium segment.
Experts recommend sellers to curb their expectations and prices to reflect the new market reality and buyers, to act quickly and resolutely to find an affordable option that satisfies their needs.