PART 2 – 2024 MIAMI REAL ESTATE REPORT

Several Miami neighborhoods experienced increased inventory and a slower sales pace. Notably, Coconut Grove and Brickell saw significant rises in available listings, with inventory levels up by around 20-38% compared to 2023. Despite what appeared to be a slowdown in sales, most markets saw properties sell much faster than a year before and inventory levels in the single-family markets remained equal. In the condo markets of Downtown and Edgewater, we did see inventory levels increase by 40 to even 60%. With that said the price per sqft and median prices actually rose.

This trend is attributed to buyer caution amidst rising prices and greater competition among sellers, reflecting a broader market adjustment across these key areas. However, what is most relevant is that the availability of quality inventory was extremely limited across many of these markets and much of the inventory that accumulated was older, of lower quality, or unreasonably priced. Those homes that did sell were desirable and the recognition of long-term growth and value means that the price per sqft figures did not suffer.

• Miami Beach Condos: Inventory increased by approximately 15% and properties stay on average 40 days longer on the market
• Surfside Condos: Reported an increase of time on the market by almost 100% (108 days compared to 58 the year before)
• Edgewater Condos saw inventory increase by 45% with a 28% longer time not the market
• Downtown condos saw inventory increase by 62.5% with 

As of 2024 the Miami real estate market is actually not going down. It is either increasing (between 3-12% depending on the neighborhood and submarket) or remaining stable. It is however giving way to some subtle market nuances which need to be understood.  The extreme value increases in 2021, 2022, and even 2023 were felt across the South Florida market but none more so than the luxury sector of the market where uber-wealthy migrating professionals and families from across the country drove up prices. The luxury segment of the market, particularly for high-end condos and single-family homes in desirable neighborhoods like Miami Beach, Coconut Grove, and Coral Gables, remains strong. Prices in these areas have generally continued to rise, although the rate of appreciation has slowed compared to the rapid increases seen in previous years. I personally have experienced many sellers overreaching who are now adjusting prices. Observing reductions across these listings has led some buyers to ask me “Is this market going down because I see all these reductions going on”. My answer is that these properties are outliers which once they come in line with sold comps will in fact trade. There’s minimal evidence of corrections in sold price per square foot, with adjustments mostly seen in asking prices.

Typically rental rates are NOT going down in Miami. The most dominant rental market in Miami is Brickell followed by the various sections of Miami Beach and then Coconut Grove. Average rental prices in Brickell, Coconut Grove and Miami Beach have increased between 3-5%. There are some specific luxury buildings that have shown a drop in rental rates:  SLS Lux Brickell  – down 4%, Park Grove – down 4%, Continuum – down 3%.

One of the newest and most pressing phenomenons is ‘older Condos’ with major assessments resulting in closed amenities and limited services which as a result become clearly less desirable for tenants. Who wants to live in a condo without a pool, gym, or operational terraces? Also factor in the rising cost of living in Miami of which rent costs are a big part. Additionally shifts in renter preferences; with some renters opting for suburban areas or more affordable neighborhoods.

It’s a ‘mixed landscape’ right now. The luxury market ($3m+) particularly in neighborhoods like Miami Beach, Coconut Grove, and Coral Gables, continues to see strong demand. High-end properties, especially those with unique features like waterfront views, modern amenities, and prime locations, often attract offers quickly and comparably as high if not higher than last year’s prices. Inventory in this segment tends to be limited, giving sellers an advantage. I personally am starting to see a lot more lower quality inventory (older, ‘in need of renovation’ or overpriced) which bloats the market. This is resulting in the inventory statistics suggesting more choice for buyers than last year but this is not the whole story. The truth is that there is no more ‘good quality’ inventory, and than there was in 2023.

The mid-range market of $1m-$3m is probably the most balanced. Again, with that said the ‘good homes or condos’ fly off the shelf as there are plenty of buyers out there. Interest rates absolutely play a part here and once rates drop you can expect an injection of demand. If you are an investor this is a good market to play in right now as it could get ready for another jump. Focus on primary markets and products bought for end users. Call me for more info. 

Highly dense urban areas with condo buildings that are not new or very generic. This market favors the buyer. With many similar condos on the market and new luxury condo developments arriving, the market has shifted to favor buyers. Additionally, older luxury condos outside of Brickell (but still in the urban core) and the beach, which are popular with luxury second-home buyers, have also seen a slowdown. We have seen much slower sales figures this year in St Regis in Bal Harbour, One Thousand Museum in Downtown, Elysee, and a few other luxury condos. 

The comments of ‘Miami is overpriced’ I have heard for years. Typically from buyers who reflect on pre-pandemic prices. These buyers consistently miss the point and wait for corrections that don’t and in most cases won’t happen. The shift in price was not caused by a rush of investors but primarily by large-scale migratory end-users who moved residency to Miami. Few left, but most stayed, and the shift in not just population but population replacement (those reporting much higher earnings annually than the previous population) meant that the properties were in fact well within their financial capabilities. In luxury areas such as Miami Beach and Coconut Grove, high prices are often justified by strong demand and limited inventory. However, for those seeking more affordable housing options, Miami real estate can feel overpriced. As a result, some buyers are moving to the suburbs to find better value. However, Miami remains a robust market due to its desirability and strong demand, particularly in the luxury segment. 

Ultimately, properties will and do sell at previous $ per sqft levels and in a number of neighborhood price points well above. In 2024 we have seen increases in $ per sqft between 3-12%. The takeaway is that ‘Quality inventory’ remains low. 

With that said, there are some exceptions. Older condos undergoing major assessments can see corrections as their value to the market diminishes. The Airbnb market has become saturated and new laws restrict the profitability of these assets finally overenthusiastic ‘make me move sellers’ who price their homes or Condos above record levels and are not that well finished or well located most certainly should be viewed as overvalued.  I have considerable experience in this area and can quickly help clients determine if a property is truly worth it or just overpriced by a seller.

There are markets in the $10m+ range that are still performing very well. These pockets focus on new homes in high-end ‘primary’ gated communities. The buying of these homes has only been tempered by the severe lack of inventory.Generally, however, Miami markets are still performing well, but the rapid growth seen in the black swan events of Covid: 2021, 2022, and the first half of 2023 has, of course, slowed. No market can naturally rise 30% year on year indefinitely! While the market remains strong, especially in luxury segments, there are signs of stabilization and modest price corrections in certain areas. Increased inventory and raised interest rates have tempered the boom, leading to a more balanced market. However, demand remains robust, particularly in desirable neighborhoods, keeping the market active but not as frenzied as before.

The best luxury residential real estate investments in Miami over the next five years are likely to be in waterfront properties, new developments in emerging neighborhoods, luxury condos in urban cores, and ultra-luxury estates in exclusive areas. Properties with eco-friendly features and smart home technology are also expected to be strong performers as demand for sustainable luxury grows. By focusing on these areas and property types, investors can position themselves for strong returns in the evolving Miami real estate market.

The luxury Miami real estate market ($2m+)  in 2025 is expected to remain strong, with continued demand from both domestic and international buyers. While the market may see more stable price growth compared to the explosive increases of the past few years, the overall outlook is positive. Key factors such as limited inventory, the ongoing appeal of Miami as a luxury destination, and the integration of sustainability and technology into luxury properties will continue to drive the market. Buyers and investors should focus on prime locations, properties with unique features, and emerging areas with strong growth potential to capitalize on the opportunities in the Miami luxury market. They should stay away from older Condos with ballooning HOA fees and properties at a higher risk of flood and insurance costs.