Miami Real Estate: Strong Growth in May 2024 Defies National Trends

Discover how Miami's real estate market surged in May 2024, outperforming national trends with increased single-family home sales, robust migration, and high cash buyer activity.

Miami’s real estate market continues to defy national trends, showcasing robust growth and stability. In May 2024, single-family home sales in Miami-Dade County rose by 6% year-over-year, driven by strong migration, a healthy job market, and a significant percentage of cash buyers. This data, provided by the MIAMI Association of Realtors (MIAMI) and the MIAMI Southeast Florida Multiple Listing Service (SEFMLS), underscores the unique resilience of Miami’s housing market.

Miami Real Estate: The Exception to the Rule

“Miami real estate is always the exception to the rule,” said MIAMI Chairman of the Board, Gus Fonte. Unlike other U.S. markets experiencing declines in prices and sales, Miami has seen a remarkable surge in home equity, nearly doubling the national average over the past 15 years. This resilience is largely due to an influx of high-income households from the Northeast and a substantial proportion of cash buyers, mitigating the impact of elevated mortgage rates.

Exceptional Home Equity Gains

Miami-Dade homeowners have enjoyed home equity gains nearly double the national average over the last 15 years, with an impressive $533,955 in equity compared to the U.S. average of $287,111. These gains are calculated based on single-family homes purchased in Q1 2009 and sold in Q1 2024, reflecting the long-term value growth in the region.

Consistent Growth in Single-Family Home Sales

Single-family home sales in Miami increased by 6% year-over-year, from 1,040 to 1,102. This marks the sixth time in seven months that Miami has posted year-over-year gains in this category. While total home sales in Miami saw a slight decline of 0.6%, this figure would be stronger if it included the robust new construction market in South Florida.

Condo Market Faces Inventory Challenges

Miami’s existing condo market saw a 5.6% decrease in sales year-over-year in May 2024, from 1,372 to 1,295. This decline is attributed to a lack of inventory at key price points, with approximately 53% of new condo inventory priced at $600,000 or above.

Luxury and Mid-Market Segments Thrive

Total home sales in the $1 million and up category surged by 9.5% year-over-year, from 409 to 448, driven by new inventory in the upper-end market. Mid-market condos, priced between $400,000 and $600,000, also saw a significant increase of 7.5%, from 334 to 359.

Miami leads the U.S. in luxury residential market price growth, according to Knight Frank’s 2024 Wealth Report, and is also recognized as an emerging wealth hub. The city ranks fourth in the U.S. for millionaire growth rate over the past decade, with a 75% increase, as reported by Henley & Partners and New World Wealth.

Continued Price Appreciation Expected

Despite high mortgage rates, home prices in South Florida continue to rise, driven by a growing share of million-dollar home sales and fierce competition for lower-priced homes. MIAMI REALTORS® Chief Economist, Gay Cororaton, predicts that price appreciation will continue, with mortgage rates expected to decline to a quarter percent below 7% by the end of 2024 and further to a quarter percent below 6% by the end of 2025.

Increasing Inventory Provides More Options for Buyers

New listings in Miami have been on the rise for nine consecutive months, nearing pre-pandemic levels. This increase has expanded total inventory, offering homebuyers more variety. In May 2024, total new listings rose by 14.12% year-over-year, from 3,280 to 3,743.

Inventory Levels Still Below Historical Averages

Despite the increase in listings, total inventory in Miami is still down 33.9% from the historical average. As of May 2024, total active listings increased by 43.7% year-over-year, from 9,331 to 13,405. Inventory of single-family homes rose by 30.8%, while condominium inventory saw a 49.8% increase.

Market Dynamics: Seller’s and Balanced Markets

The months’ supply of inventory for single-family homes in Miami stands at 4.4 months, indicating a seller’s market. For existing condominiums, the supply is 8.6 months, suggesting a balanced market. Nationally, total housing inventory at the end of May was 1.28 million units, up 6.7% from April and 18.5% from one year ago, with a 3.7-month supply at the current sales pace.

Record-Setting Home Price Appreciation

Miami-Dade County has experienced 12+ years of consecutive home price appreciation. In May 2024, the median price for single-family homes increased by 6% year-over-year, from $620,000 to $650,000, marking a 242.1% increase since May 2012. Similarly, existing condo median prices rose by 2.4%, from $415,000 to $425,000, achieving a 183.3% increase over the same period.

Affordable Housing Initiatives

Florida’s Live Local Act, passed in 2023 and amended in May 2024, is encouraging developers to build more affordable housing. This legislation allows for higher density if developers allocate 40% of units for affordable housing, defined as being at or below 120% of an area’s median income.

Comparative Value of Miami Real Estate

Despite rising prices, Miami remains a value compared to other global cities. According to the 2024 Knight Frank Wealth Report, $1 million in Miami can secure at least 60 square meters of prime property, far more than cities like Sydney, Shanghai, Paris, and New York.

Significant Wealth Migration to South Florida

South Florida continues to attract significant wealth migration, bolstered by a strong economy and business expansions. In 2023, 153,347 driver licenses were exchanged for Florida licenses in Miami-Dade, Broward, Palm Beach, and Martin counties, up 8.3% from 2022.

Economic Impact of Home Sales

Each home sale in Miami contributes significantly to the local economy, with a total economic impact of $123,000 per sale. In May 2024, Miami-Dade’s 2,397 home sales generated a local economic impact of $294 million.

Robust Dollar Volume in Home Sales

Miami’s total dollar volume for May 2024 reached $2.2 billion. Single-family home dollar volume increased by 21.6% year-over-year to $1.3 billion, while condo dollar volume decreased by 4.1% to $943 million.

Low Distressed Sales Reflect Healthy Market

Distressed sales in Miami remain low, comprising only 0.9% of all closed residential sales in May 2024, down from 1.1% in May 2023. This is significantly lower than the national distressed sales figure of 2%.

Miami’s Real Estate Market Outperforms National and State Trends

In Florida, single-family home sales totaled 26,252 in May 2024, down 0.5% year-over-year, while existing condo-townhouse sales fell by 8.6%. Nationally, total existing home sales dropped by 0.7% from April to May, with a 2.8% year-over-year decline.

Near List Price Transactions

In May 2024, the median percent of the original list price received for Miami single-family homes was 96.2%, and for existing condos, it was 95.2%. The median number of days between listing and contract for single-family homes was 33 days, and for condos, it was 46 days.

High Percentage of Cash Sales

Cash sales accounted for 38.5% of Miami's closed sales in May 2024, compared to 40.9% in May 2023. This high percentage reflects Miami’s appeal to foreign buyers and those relocating from more expensive U.S. markets.

FAQs

What is the current trend in Miami's single-family home sales? Miami's single-family home sales increased by 6% year-over-year in May 2024, continuing a trend of growth in six of the last seven months.

How does Miami's home equity gain compare to the national average? Miami-Dade homeowners have earned nearly twice the national average in home equity gains over the past 15 years, with $533,955 compared to the U.S. average of $287,111.

What factors are contributing to Miami's real estate resilience? Miami's real estate market is bolstered by strong migration, a healthy job market, a high percentage of cash buyers, and significant home equity gains.

How has the luxury home market in Miami performed? Miami's luxury home market, particularly homes priced at $1 million and up, saw a 9.5% increase in sales year-over-year in May 2024.

What is the impact of high mortgage rates on Miami's real estate market? Despite high mortgage rates, Miami continues to see price appreciation due to the rising share of million-dollar home sales and strong buyer competition.

How is Miami addressing affordable housing? Florida's Live Local Act encourages developers to build more affordable housing by allowing higher density if 40% of units are designated as affordable, at or below 120% of an area's median income.

Conclusion

Miami's real estate market demonstrates exceptional resilience and growth, outpacing national trends with increasing single-family home sales, robust home equity gains, and a high percentage of cash transactions. The city's appeal to high-income households, coupled with strategic initiatives to enhance affordable housing, positions Miami as a dynamic and attractive market for buyers and investors.