Real estate agents, buyers, and sellers are getting ready for the emerging economic recession and many would like to know how it will affect South Florida. During the pandemic, there was a record-setting increase of prices, the number of transactions, and the volume of sales in dollar value in this region but a slowdown could be around the corner.
Danielle Hale, Chief Economist at Realtor.com, sees no signs of a significant decline in South Florida. People are still moving to the Sunshine State, foreign buyers are coming back to the market, and the devastation caused by Hurricane Ian will probably make buyers and tenants focus on the eastern coast.
Nevertheless, housing sales have dropped this year and the price growth has slowed down after a record-high performance of 2021.
Hale and other experts expect a further downturn in the nationwide market. Danielle believes that the key driver of the demand is availability, which works for Miami’s benefit. This is certainly not the cheapest market in Florida but the state itself is still far more affordable than many other parts of the USA, which invariably attracts buyers.
As for the expectations for 2023, Danielle is certain that sales of residential properties will continue to grow, although slower, as the market is currently not very generous to buyers, being a seller’s market. The activity will therefore reduce. People who have no urgent need to sell their homes (with a mortgage rate under 3%) immediately will not do it, particularly as it is challenging to buy a new residence now.
Prices will most probably drop the most where they used to be growing the fastest, putting Miami in an interesting position. The rent has surged there, so house prices have grown too. The Miami real estate market has experienced no decline yet. Perhaps the reason is the activity of foreign investors and home-hunters who are returning to this lucrative location after the end of the pandemic and compensating the lower demand from local residents.