Miami Real Estate Market, Overview and Perspectives

Header of a blog post with Ora by Casa Tua as background in Miami

The South Florida housing market has been on a steady rise, with home prices continuing to soar and inventory remaining limited. During 2022 we saw a very strong seller’s market with many sellers receiving top dollar for their properties. This is due in part to an influx of people and businesses moving from high-tax and high-density areas, as well as increased foreign investment in the state’s property market. Moreover, as mayor Francis Suarez has expressed, it is estimated that during 2023 around 122 big corporations will move their headquarters to Miami, increasing the influx by thousands of new employees looking for places to live. 

In 2022, the Miami-Dade County real estate market reported sales of over 31,000 homes and nearly 20,000 condos, making it the second-best year in Miami’s history according to the MIAMI Association of Realtors and the Multiple Listing Service (MLS). Despite rising mortgage rates, the Miami real estate market demonstrated resilience and continued demand. One factor that has played a key role is Miami’s status as a global business hub, creating a strong job market and attracting talent from around the world. No longer is Miami considered a tourism-only driven economy, but a diverse and global one.

Miami’s metropolitan area is among the top 10 U.S. metros with the highest growth in homebuyer income during the pandemic, according to a Redfin report. This has contributed to the increase in median prices in the local luxury sales market year-over-year. One of the key factors driving homebuyer growth is the continued investment in infrastructure in Miami. The city has been making significant investments in infrastructure to support its growing population, including new transportation systems and public parks, making Miami a more desirable place to live, work, and play: common line now used by some of the over 24 top pre construction projects we at BlokHaus promote in the City, which in turn, contribute to Miami’s growth attracting ultra high net worth individuals looking for a second home or an investment property. 

One of the most highly anticipated infrastructure projects in Miami is The Signature Bridge, which is currently under construction along with The Underdeck Park. According to The Next Miami, this almost $900 million project will rebuild the intersection between the I-95, the 836, and I-395 at the entrance to downtown Miami, very close to one of our highlighted pre-construction projects: Casa Bella.  The Underdeck is a new park and public space beneath the I-395 overpass, connecting neighborhoods and providing new recreational opportunities for residents.

Image Source: The Next Miami

Moreover, the Underline project which has already begun construction, is expected to be finished by 2025 with 10 miles of linear park from Brickell to South Miami accounting for an extra $150 million.

Another major infrastructure project that has drawn attention to Miami is the Brightline Miami-Orlando rail system. This $2.7 billion project, which is currently under construction, will create a high-speed rail line connecting Miami to Orlando reducing the commuting time between the two cities by 50%. This will bring the travel time down to around 2.5 hours, making it easier for residents and visitors to travel between the two cities. The new high-speed rail system, which is expected to be completed in 2023, is poised to have a significant impact on Miami’s economy and real estate market.Brightline provides an alternative mode of transportation to driving, which can help to reduce congestion on highways and improve the overall quality of life in the region. Furthermore, Brightline has the potential to increase property values in areas that are served by the train, as it makes it easier for residents to commute to work or travel to other areas of Florida. 

This increased accessibility can make these areas more desirable and lead to higher property values. Investors looking for new development projects in Miami may find the 600 Miami World Center appealing. Strategically located near the Miami Brightline Station, the building permits short-term rentals and has solid potential for rental income and appreciation. Prices for the condos start at around $430,000, and they are selling quickly. Blokhaus specialists can help you find the most attractive apartment in this property and guide you through the process. Visit our website for more information.

The Miami International Airport is also undergoing a massive $5 billion renovation plan, which will modernize and expand the airport to accommodate the growing number of visitors to the city. The renovation plan includes a new hotel, new gates, and expanded retail and dining options, making the airport a destination in its own right. The project is expected to be completed by 2040 in anticipation of an estimated 77 million travelers passing by. 

How does all the above translate into actual numbers in the real estate market? NeighborhoodScout’s data shows that Miami real estate has appreciated by 199.32% over the last decade, with an average annual home appreciation rate of 11.59%, placing Miami in the top 10% nationally for real estate appreciation. And in the last twelve months between 2021 Q3 – 2022 Q3, Miami’s appreciation rates continued to be among the highest in the U.S. at 24.03%. The latest quarter (between 2022 Q2 – 2022 Q3) saw appreciation rates of 5.87%, equivalent to an annual appreciation rate of 25.64%.  In real estate investing, returns typically come from two main sources: property appreciation and cash flow. With rental prices in Miami experiencing significant growth over the last few years, up 25% from 2021, investors can expect solid returns from cash flow. In fact, prices have increased by 5.6% year-over-year in 2023, which is double the national average in the US. Therefore, investing in Miami real estate could prove to be a lucrative opportunity for those seeking both appreciation and cash flow returns. For sophisticated investors, pre-construction projects that allow for short-term rentals without restrictions may be of particular interest. At Blokhaus, we offer a range of such projects that promise not only strong appreciation potential but also robust rental income.

To visualize the above, imagine having purchased a $450,000 condo in Midtown Miami in early 2021. Today, that same condo could be worth around $775,000. That’s a substantial increase of $325,000 in just two years, without even factoring in the potential rental income from both long and short-term rentals, which are highly in demand in the area.

For investors seeking opportunities with strong appreciation potential and rental income growth, Vida Residences is a prime example of a new development worth considering. With only 121 units available for sale, this project offers a unique and exclusive investment opportunity in Miami’s real estate market. Trust the experts at Blokhaus to help you navigate the market and find the best investment opportunities to meet your financial goals.

These figures and trends are incredibly promising and support our experts’ positive forecasts for Miami’s real estate market in 2023 and beyond. At BlokHaus, as a luxury real estate brokerage, we are excited and proud to see the continued growth and success in Miami as a whole. The combination of a great political plan, unique people and talent as well as a diverse culture have made Miami a global hub for innovation and growth. All of this in turn becomes the backbone of what we think is a very solid and prosperous real estate market with strong upside potential.