The 2018 Miami Real Estate Forecast [Updated with 2020 Miami Real Estate Forecast]
6 Predictions for the Miami Real Estate Market in 2018
We all wish we could foresee the future to make the best investment decisions. It is difficult to make predictions as the real estate market is subject to so many external factors. While I was writing my 2017 Miami Real Estate Report I was often thinking of the different directions the Miami housing market might take. Therefore I decided to put my thoughts into words and created this blog for you, presenting the 6 possible forecasts for the Miami real estate market.
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Condo prices will continue to drop
One scenario to keep in mind is that condo prices will continue to drop. This is especially through for the urban core as there is a lot of new products entering the market. As mentioned in several of our blogs, many of the new condos in the urban core are standard products that are all bought in a bullish market, while those buyers are now trying to offload in a bearish market.
The same goes for many condos in Miami Beach and Sunny Isles where a massive amount of ultra-luxury condos has been built, which are now sitting on the market. The only way to decrease this massive inventory and to stabilize the market is by reducing prices.
Deals done by Bold Buyers
The best deals will be done with ‘bold buyers’ willing to come in and make offers (up to 30%) below asking. With so many sellers and properties priced above market value, bold buyers might get lucky. Many owners need to sell their properties very fast and will take a cash offer that will cover their costs or mortgage.
In this market (mostly on the Beach) we see a lot of overpriced condos that are lifting their prices because of neighboring ultra-luxury projects. Although high-end condos might lift the prices in a certain area, it wont justify hefty over-market asking prices for condos that are not up to par. Sellers of such units will soon enough notice that today’s buyers are more price conscious and won’t pay above market unless the property justifies the price.
Single family will remain stable, but very high end homes will still be slow
The single-family market behaves in a completely different way than the condo market. We have seen steady increases over the last few years and the necessary corrections have taken place already for the most part. It is just in the ultra-luxury market that we see less demand, yet more demanding buyers. In our 2017 Miami real estate report we showed that even in very healthy markets, the highest prices per SF saw a decline. This means that buyers are not paying top-dollar anymore for properties that are not finished perfectly or otherwise justify the high Dollar amount per SF
The Coconut Grove home market still sees a strong demand
North Eastern buyers from the US will drive the market through 2018
There is less demand for Miami real estate from foreign buyers (besides the Turkish market), but this is compensated by the influx of North Eastern buyers from the US. We are getting a lot of requests from (mainly) New Yorkers looking for a second home in Miami or even a first home as they are relocating to the South.
Builders will focus on more affordable entry levels homes
Builders will focus on more affordable entry levels homes as anything under $1M remains highly desirable. The next generation is looking for entry level homes and finds it often hard to get that perfect home. Remodeling or rebuilding really dated homes will remain a trend as well as seeing developers focusing on homes just below or on the $1M mark.