Miami Housing Market Trends | The Q3 2022 Miami Real Estate Update

Miami Housing Market Trends | Mind the Gap Between Sellers and Buyers

Who this article best serves

This article is particularly useful for those looking for or considering selling their single-family homes. Additionally, it is helpful for homeowners with expired listings who have tried selling and are scratching their heads wondering why their property did not sell.

So why is this article titled: ‘Mind the Gap?’ Simply put, it is referring to what seems to be an emerging shift in psychology. In a number of cases, we see sellers are expecting one price but buyers are thinking quite another. This gap in pricing psychology is what we believe is slowing down sales in certain sectors.

Miami Housing Market Trends | A Shift in the Miami Housing market

We started this year with extremely low levels of inventory. Although inventory is still low, it is growing at a fast pace. The quality of products entering the market, however, is not top-notch. Additionally, there is a standoff between buyers and sellers right now. While sellers look at the past and reckon they can still get top dollar, buyers are looking ahead and do not want to pay top dollar anymore in this market. Some sellers are asking high prices for properties that do not justify such a price. These houses will therefore stay on the market for longer or not sell at all.

We experience a massive discrepancy between what one group wants to receive and what one group wants to pay. Sellers shoot for the moon and ask for too much money. They saw their neighbors do the same, and buyer desperation made this possible 6 to 12 months ago.

The David Siddons Group listed a newer South Miami home last week, and the phone rang non-stop. If you have the right product and ask for the right price the property will sell.

Sellers have to come to their senses and price their homes according to the market. Sellers who bought in 2021 and add 30% to that price in 2022 will not sell. It has nothing to do with the state of the market, it means sellers are unrealistic and need some time to realize the market has shifted.

 Miami Housing Market Trends in Q3 2022 | The Accelerated Inventory Growth

The below graph shows the sales, listings, and inventory per quarter of 2022. In the individual articles referenced at the end of this blog, we go into further detail per neighborhood. This is the overall $1M-$10M condo market in the referenced neighborhoods. The graph shows that compared to the start of 2022, there are 44% fewer sales and 3.5 times more listings on the market. Therefore, the market is seeing more months of supply. The months of housing supply came from a record low of 2 to 3 months and is now around 7 to 8 months. This is still a seller’s market, although it is going towards a balanced market in which sellers nor buyers have a specific advantage.

Our Track Record

At the David Siddons Group, we have a proven track record of selling homes at record-breaking prices. At the same time, we are not afraid to have sincere and direct conversations with sellers regarding the value of their homes. If we think they are just overpriced and not going to sell, we will mention it. The last thing you need is a sycophantic realtor. Certainly, good marketing comes into play, and our arsenal of marketing tools is extensive. We have a large database, and unsurprisingly, with nearly 50,000 site visits a month the market is tuned into our site for better decision-making info. However, if you do not price your property right in a market facing downward pressure, you will get disappointed!

In another very recent article, we spoke to condo sellers. You can go back and read this report here. In this article, however, we address homeowners. We have included our recent podcast interview with Paulo Rodriguez. The podcast is particularly relevant, aside from many other economic observations, it talks about the slowdown in sales across Miami’s home markets and the increasing active days on the market caused by the psychological gap between buyers’ desires and sellers’ expectations.

As always, refer back to our analytics software. You can visit our newly updated Neighborhood Market Statistics page. Click on the neighborhood most relevant to yourself to see the current months of inventory and other data.

Should homeowners Sell Now?

The single-family home market has always been more stable than the condo market, and homeowners can feel better about their position than many condo owners. Condos and homes behave differently, more often than not because homes typically serve the primary market, and condos serve the secondary and investor class. Additionally, we have seen the building of condo UNITS in greater numbers and faster than we see homes being built, especially in an area like Miami. Moreover, new homes take around 2 to 3 years to complete, and land, labor, and material are not so readily available.

As mentioned earlier in this article, we have seen many new listings, while pending and closed sales are down. For any market to see a large drop in value, it would take a massive increase in inventory. Even though inventory is growing, it is not dangerously high in a number of markets, and historically rarely ever gets that way. 

There is demand, although slower than before. Positively, Miami is STILL a growing global city, and businesses and families are still migrating here faster than those leaving. We are still experiencing a low supply of new luxury homes in prime locations. Gated and waterfront homes still pose a supply problem for many buyers.

The Biggest Challenge

The biggest problem right now is some sellers not being realistic. The seller’s market has enjoyed the benefits of huge demand and low supply for a couple of years. Along with rock-bottom interest rates, sellers could ask pretty much for whatever they wanted, and they would still get traction. That momentum, however, is over. This is not the market we experienced 6 to 12 months ago. If you want to sell your home right now, you need to price your home right. You will still be able to walk away with a good profit, but you must be realistic and not get greedy waiting for that one buyer who will pay over the market price. 

With all that said, some property is still very hot. New or newer custom homes are still so hard to find. We just listed a new home, and the phone rang non-stop. We also have several clients patiently waiting for a superb custom home in a prime location to come along. New homes are what so many people want, and until the market can produce more of these (which takes three years to finish), these will stay desirable and can achieve a premium. Dated, less unique houses and cheaply renovated homes will be harder to sell. List prices are no longer the starting point of negotiations but the absolute ceiling. Few, if any, buyers are going to pay more than what was paid in March 2022. I added a list of 16 homes that sold in the last two months that were priced right and sold near, at, or over their asking price.

What our Neighborhood Statistics tell us

The statistics pages for the different neighborhoods will reveal the specific sales from the last 90 days. Users who registered on the site can go back further than 90 days. You can browse the specific sales that happened, and observe what is transacting at the highest price per sqft and why. For a granular analysis of a property you are interested in selling (or buying), please call me, and we can plug your subject property into the stack to see how it compares. This advanced feature is not part of the website’s front-end functionality, but a highly advantageous tool to assess real-time property values.

Miami Housing Market Trends | Our 90-Day Neighborhood Specific Updates