Mixed signals is a phrase which has been characterizing the housing market in Miami for a while now. On the one hand, we have the rising home sale prices and rents, which have been outstripping wages. The climbing costs even pushed Miami up a place in the table of the most expensive cities to rent a one-bedroom apartment in, to number eight. But not all sectors have been performing like this; in fact, price tags for condos and luxury homes in some posh areas have seen a slight decrease. And Miami’s stabilizing factors, such as its location, its great climate and its expanding population, help reassure us that the city can accommodate the current price fluctuations.
In March 2016 the price of single-family homes in Miami-Dade County increased by 7.7% while the price of existing condos fell by 2.5%, and the number of sales is declining. There is also an increased inventory, which can make things harder for sellers. This slowdown is the effect of a strong dollar and the Latin American economies, but an upturn is predicted.
A recent report by Douglas Elliman and Miller Samuel Real Estate Appraisers & Consultants points to falling prices and sales in posher areas like Miami Beach and its nearby islands – they even use the word ‘meltdown’. The cause is a weaker demand from overseas buyers and a vast new crop of luxury condo towers that’s swelling the inventory. Canadians, for example, although they have Florida on their list of preferred “hot” real estate markets, have been cautious about buying property overseas due to a weaker dollar. The report does concede, however, that the broader Miami market fares better, with the median sale price having gone up by 7.4%.
For a first-hand opinion of the real estate market in the Magic City, we spoke to Samantha DeBianchi, a top broker and one of the stars of Bravo’s Million Dollar Listing Miami. She emphasized that the very low interest rates make it great to be a buyer here, and she still regards renting as a good option. This is what she said with regard to some pertinent questions:
Q: Some say the Miami housing marketing is still affordable. Do you think it will stay that way for much longer?
A: I think everyone’s interpretation of “affordable” is different – other media outlets state that we have a huge affordability issue. Rents and prices have gone up hugely but wages have risen nowhere nearly as much. With that said, I do believe that there are still opportunities out there – you just have to find them. If you want a good deal, you need to work a little harder, do a little more research, and know how to negotiate appropriately. With the very low rates it’s still a great time to be a buyer.
Q: What advice can you offer a first-time homebuyer in Miami?
A: Take advantage of the currently very low rates and if you find something you truly love, negotiate – but not lowball – and make it happen. Although prices have been a bit inflated there are still deals to be made. Sometimes first-timers get stuck in the “wanting the best deal” game, but it’s better to focus on getting the right property for you, not necessarily the deal of the century.
Q: What are your favorite Miami neighborhoods?
A: Edgewater, South of Fifth and Coconut Grove. I think they all have amazing character and, even in inflated times, are good investments.
Q: Florida is a very attractive market for international buyers, as you mentioned recently. What are some of the destinations you would recommend to them?
A: International buyers love Miami for a number of reasons: the weather, the entertainment, the ease of access. The top two locations for international buyers in my opinion are South Beach (for the beach life) and Brickell (for the city life). Many times, international buyers will purchase a place in each (despite the fact that they are so close to each other) so that they can experience all of Miami life!
Q: Miami is one of the country’s most expensive cities to rent an apartment. Do you see this changing in the near future?
A: Rents are insane right now but if you’re not in a position to buy, renting is still a great option, and there’s news out there that things are slowing down in general. I should mention investors at this point: while this is definitely not a market to be flipping in, if rents continue to stay strong, we will definitely see a good market for buying up properties in order to rent them.
Is Miami still a magic city to live in? Despite the mixed signals, we conclude that it is. Take advantage of the current situation and buy if you can or, if that’s not an option, look around for a rent that suits your budget. Happy hunting!