Introduction to our South Miami Real Estate Market Forecast
Welcome to our South Miami Real estate market forecast. South Miami has always been a local favorite but perhaps a bit less well-known to those from outside Miami however, it is gained massive traction over the last three years and has emerged as a top neighborhood in Miami. 2023 is looking very well and feels like we will continue to see some of the same but with some small differences. It is widely recognized, that towards the end of 2022, there was a deceleration in the pace of real estate transactions, with a slight upswing in the inventory and the number of days properties remained on the market. The South Miami market, however, is doing extremely well, and due to it being: ‘better value’ it is outperforming almost every other market!
A neighborhood with excellent value
The home values are better (for buyers) than those neighboring: High Pines and Coral Gables but the curb appeal is equal, homes styles are equal, and walkability is better! I don’t foresee a future where prices will drop in this market. In my view, values are stable, and we may only see minuscule fluctuations in the average property prices. On the other hand, newly constructed and remodeled homes will likely continue to command high prices, and records will probably keep being broken. The cost of construction is still rising, the demand for new homes remains high, and the supply of new products is still very limited, so I don’t think that new homes will decrease in value from the 2022 levels. Today’s market is a consequence of the last two years, where many of the high-quality listings were sold, and now we are witnessing many homes that are unrealistically priced and remaining unsold for an extended period. Sellers may need to revise their asking prices downwards, but their closing prices will most probably match the 2022 market.
5 Observations for South Miami and High Pines
- Stand-off between sellers and buyers. Sellers are still price happy from 18 months ago when every month their home value increased by 1%, and on the other hand, buyers are making offers as if the market will correct over the next six months. Sellers and buyers are not on the same page causing sales to slow down. Buyers are being much more selective and patient at the moment.
- The top end of the luxury market has exploded. In 2020 the most expensive sale in South Miami was $3.5m, in 2021 the highest sale was $4.5m, and in 2022 the highest sale was $7.5m! We will continue to see high prices in the $5m+ market for newly built homes as inventory is still at a record low for this product, and the demand is still high. In homes built post-2015, the average price per foot went from $500-a-foot in 2020 to $585 in 2021 to $875 in 2022. Several homes sold over the $1,000-a-foot mark, new territory for South Miami homes.
- Entry-level price has skyrocketed. It is hard to get a home under $1M, not at or near land value. The average asking price is around $1.7m. A steep increase from $962K in 2020.
- Inventory is rising: Yes, inventory is rising, but there is a lot of ‘junk’ and the junk is staying on the market for an extended time, causing more inventory. However, when a quality property is listed and priced fair, it will sell immediately.
- Fewer trades. In 2020 there were 214 sales, 247 in 2021, and only 132 in 2022. It seems fewer people want to sell. If these owners did not want to sell in 2021/ 2022, they probably aren’t going to sell now. Schools are experiencing record-breaking applications while less than 1% of families leaving schools. This is another sign of a strong and stable market for 2023.
Advice for Sellers
Hire a seasoned and knowledgeable agent. A good neighborhood agent will price the home right, which is super important at the moment. Overpriced homes are being ignored by a smart pool of buyers. Also, pay the standard commission! Hiring a discount service never benefits the Seller. In a slowing market paying the standard 3% is the best marketing. For sale by owners end up with less in their pocket at the end of the day, and I can’t tell you how many listings I have seen in the last year of agents we have never seen or heard of, that does not represent the property correctly.
Advice for Buyers
Don’t treat sellers like they do not have any other option. There may not be a frenzy of buyers like a year ago but there are still strong active buyers in the market. Many buyers are still losing homes by missing the sellers low. Go off the market! Get a proactive agent like me who will get the product you are looking for, instead of just sending you what’s on the market.
Conclusions
South Miami is alive and well, better than ever, with a bright future for 2023. Many new homes are being completed this year that will continue to break records. Houses with older roofs or cheap finishes, however, that were able to fetch a high price in 2021 and 2022, are no longer achieving the same result. In 2023, buyers will not overpay for low quality. The South Miami neighborhood is currently being transformed. Old homes are demolished, and new homes are being built. A clear indicator of a strong and stable market.
