Miami Real Estate Forecast | Miami Real Estate Market Predictions for 2023

The Miami Housing Market Forecast 2023

Introduction

Welcome to our Miami Real Estate Market Predictions for 2023. This Miami real estate forecast is not your standard report. We do not merely tell you how much prices have gone up, inventory has gone down, and it’s still the best market ever. Our reports are very specific and talk about concrete price points in specific geographical sub-markets. Different sub-markets react differently to macroeconomic influences and attract different buyers. Therefore, we analyze each sub-market separately without generalizing the entire market.

Miami Real Estate Market Predictions | 10 Key Takeaways for Buyers and Sellers

1. A Balanced Market – Following a period of extreme purchase behavior in 2021 and 2022 the Miami real estate market remains very robust. Months of Inventory (MOI) has not and will not balloon as some expect. Sellers still have the advantage in many cases. We divide Miami into 18 different neighborhoods with 5 different price points for each neighborhood. This means there is a variable of 90 possible outcomes. Within these 90 submarkets only a small handful (less than 10%) show signs of excess inventory. Read the individual reports to see which ones or visit our market statistics page. Miami is averaging 9 MOI across most major markets.
2. Continued Migration with Low Attrition Rate – Continued Migration is still very real, and Florida’s population grew by 2% over 2022. These wealth migrations are likely to continue as long as our feeder states are experiencing socioeconomic issues. In addition, Miami’s attrition rate is lower than ever before Miami’s population grew by 2% in 2022. Private Schools admissions are up 50%.
3. Lack of Quality Inventory – We are seeing the same amount of active buyers as in 2022, although the difference is that the availability of quality products* is greatly diminished. There is still a demand for quality products, but the inventory is limited, leading to slower sales and increasing inventory levels. Buyers are no longer desperate to buy a property and to compromise during their search. These days they prefer to wait rather than settle for a badly finished or dated property. * With quality products, I mean newer condos (post-2017), prime luxury condos, newer homes, or custom-built, superbly finished homes). Newer homes average just 11% of total sales and in many areas just 7% of inventory.
4. Stable Price Levels – We do not expect a drop in prices, however, simply put, because the supply of inventory is still low in most of the markets. Although inventory has been increasing, we are still dealing with a manageable amount. Moreover, there is a lot of overpriced or low-quality product on the market, which inflates inventory levels and has little to do with the overall market performance. Quality-product still trades very fast. Although we expect more stability concerning price levels, in some areas, there is still potential for the market to go up. This depends on the product type, area, and availability of new inventory. Prices are still up 3% in the last 6 months.
5. Affordability is a Growing Concern – Affordability is a growing concern with entry-level home prices starting at around $2 million in prime residential markets and new construction homes starting at $6 million. The low inventory levels in these markets do not allow for prices to adjust any time soon. The condo market, especially in the beach areas, is dominated by ultra-luxury condos, with limited options in the $3 million to $6 million range. The entry price for Single Family Homes is up 70% from 2021. Condos are up 26%. 
6. Expanding inventory across a few Condo Market Sub Sectors – Although inventory remains low almost systematically across all markets there are a couple of condo Sectors where inventory is beyond 25 months. Investigation reveals that specific property types are becoming harder to move. Older Condos (pre-2010) with ballooning HOA Fees and original units are stagnating on the market as more and more inventory enters. Renovation costs have increased substantially, and this product increasingly gets seen as a ‘headache’ to take on. Inventory for $3-$5m Condos in Brickell and Sunny Isles hits 30 months. 
7. An expected correction of asking price per SqFt for very large older homes in many markets. Once again, with rising renovation costs, older homes become harder to renovate and become as expensive as building a new home. Older Pinecrest homes stay 80% longer on the market and sell at 5% LESS compared to last year.
8. Record Breaking Sales prices per Sqft for Ultra Luxury Homes and Condos set to continue in 2023. As migration from the high-tax states continues, the values of Miami properties continue to resemble property values in Manhattan and LA. The ‘first choice’ desire for new luxury homes and Condos from wealthy relocating professionals from these states, combined with the severe limited supply will potentially push prices EVEN higher. 2022 top 5 home sales $4000+ per SqFt. Top 5 condo sales $5000+ per SqFt.
9. New Condo Construction will remain the focal point of luxury condo buyers. As the provision of newer products focuses on larger units (3 bedrooms+) the increase of more primary luxury condo buyers marks a systematic move away from cheaper condo ‘investor class product’. This hopefully ensures a more robust long-term market. New Condo Construction product shifts the high price per sqft bar into un-chartered territory over $5,000 per sqft and, in some cases, for penthouse products over $6,000 per sqft. 25 Miami new construction Condos.  Avr $2,000 per SF+ 
10. Land will continue to appreciate. As long as the ceiling end of our housing market remains high and the desire for new homes continue (we don’t see buyers not preferring new homes). The appeal of building your own home will remain and so will the desire for land to build it on! The top end of our housing market saw a systematic jump in sales price per SqFt to new record prices and in effect so land value will continue to increase. We work with many investors and home buyers to identify off market land deals. Example: Miami Beach waterfront reached over $1000 per sqft. Coconut Grove / Gables dry lots hit $185  per sqft.

Miami Real Estate Market Predictions per Neighborhood

COMING SOON: Links to Key Biscayne and the beaches

Coral Gables real estate forecast

Coral Gables’ primary nature, low inventory levels and high demand by continued relocating families ensures a stable if not small positive appreciation into 2023. Read the full Coral Gables real estate market forecast.

Coconut Grove real estate forecast

The primary characteristic of Coconut Grove  combined with low supply and high demand due to ongoing family relocations, limited space and the perfect location, will likely lead to a stable and even slight increase in property values in 2023. Read the full Coconut Grove real estate forecast.

Pinecrest real estate forecast

Pinecrest is a mixed bag! Newer homes and North Pinecrest homes remain in short supply and popular as they provide a very real alternative to the Gables but bigger lots. The older homes and South Pinecrest homes have seen a slow down in sales and will we predict continue to do so through 2023. Fortunately its great private schools keep this neighborhood from too great a drop. Go to our Pinecrest report to read all the details.

South Miami real estate forecast

The South Miami home values are better (for buyers) than those neighboring: Coral Gables or Pinecrest, 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. Newly constructed and remodeled homes will likely continue to command high prices, and it’s probable that records will keep being broken.  Read more about our forecast of the South Miami real estate market.

Miami real estate forecast for the Urban Core (Brickell, Downtown and Edgewater)

Brickell and the Urban core are traditionally investor-class markets. On average, 80% of the market is destined for the rental market. As long as rents remain stable and the underlying assets keeps it value, the market will remain stable. We do see a ballooning inventory in several sections of the market, so we could anticipate some price corrections. Read our Downtown forecast  for more information

Sunny Isles Real Estate Forecast

The Sunny Isles condo market is one of the two markets in which we see the highest uptick in inventory – the other is Brickell. We believe this increase in inventory is caused by a growing divide between overzealous sellers asking for ‘peak’ prices against a backdrop of the now cautious buyer. The market is one of Miami’s most volatile and elastic markets, as it is one of the most investor-driven and second homeowner markets in Miami. Some condos continue to do well, while others are showing clear signs of fracturing. Read the Sunny Isles report here.