Is Miami’s housing market in a bubble? Experts say no. Or at least, not yet.
Online real estate company Zillow polled nearly 70 housing experts about which local markets across the U.S. are experiencing a price bubble.
Only four of them said Miami was currently in a bubble, although six said there’s “significant risk” of one forming in the next year. Nineteen experts said we could see a bubble in the next three to five years. Thirteen said we shouldn’t expect one at all. (The rest didn’t have an opinion on how frothy Miami’s market is.)
The experts were more worried about places where oil and tech booms have led to rapid, possibly unsustainable price increases including San Francisco, Houston and Seattle. New York City also made the list of bubble markets.
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Home prices in South Florida have skyrocketed since the housing market began recovering in 2011, fueled by investors from abroad. But the growth hasn’t returned the region to the heady pre-crash days. Home values still stand at about 70 percent of their all-time high in 2006, according to the S&P Case-Shiller Home Price Indices.
And as Latin American and European economies struggle, Miami has seen its pool of foreign buyers shrink and price gains slow down. Already, developers have canceled several condo projects slated for downtown.
The slowdown in price growth could be a good thing for locals. Because of low wages, Miami is one of the least affordable housing markets in the U.S. That situation would improve if paychecks catch up with prices.