Miami-Dade’s sizzling housing market ended 2021 at a record level. What keeps driving this upward trend?
Miami-Dade County home prices climaxed in December again setting an all-time record, largely due to the steady stream of out-of-state buyers, closing a year when the housing market exhibited contradictory trends: consistent demand and growth yet less affordability for broad swaths of the area’s workforce.
Single-family home prices peaked in December, exemplifying the migration of buyers moving to South Florida from across the country during the coronavirus pandemic.
In Miami-Dade, the median sales price jumped by 15% for houses to $525,000 in December, from $454,900 in December 2020, according to the housing data released last week by the Miami Association of Realtors. Broward County’s house prices rose just over 16% annually, to $500,000 from $430,000 last year.
The median sales price last month is the highest ever recorded in Miami-Dade, since the association started tracking the housing market in 1993. It exceeded the previous high marks in April and July when median prices reached $515,000.
Blame short supply and high demand from buyers for the lofty prices, experts say. Miami-Dade has two months of houses on the market for sale and just over three months of condos, making it an extremely tight inventory. Broward has about a month of supply of houses and nearly two months of condos. A supply of six to nine months is considered a balanced market.
“South Florida is so competitive and is popular real estate,” said Cordelia Anderson, founder of the Miami-based I Heart Real Estate LLC brokerage firm. “You hardly have time to have an open house.”
Given the slim pickings, more buyers paid cash in 2021 to land their dream home in the Miami and Fort Lauderdale metropolitan areas. In Miami-Dade, 1,387 house deals closed with cash last month, up from 963 cash deals closed in December 2020. Broward saw 1,284 cash deals, up from 1,044.
Escalating prices and cash deals were telltale signs last year of newcomers following their companies’ expansions and investors buying into a hot housing market and forcing many people in the middle-class to continue to rent. Firms keep expanding, banking on Florida state tax savings combined with the 2017 U.S. Tax Cuts and Jobs Act.
In assessing the competitive Miami-area housing market, Miami Way Realty broker and President George Jalil considers this to be the consequence of having a thriving city. Quality schools, business development and low taxes over the last five years have made quality of life in cities like Miami appealing — yet unaffordable for many people.
Indeed, Miami continues to suffer a home affordability crisis, despite city and county efforts to deliver more affordable and workforce housing. With Miami-Dade County’s median annual salary at $38,688, Florida International University economics professor Ned Murray called the area “totally unaffordable.”
At that salary, Murray, the university’s associate director of the Jorge M. Pérez Metropolitan Center for economic and housing research, said 92% of Miami-Dade households can’t afford to own property. He does not expect that percentage to decrease in the next 12 months.
Condominiums remain the more attainable option for buyers, despite similar double-digit jumps in prices as single-family houses. Prices in December rose by 29% in Miami-Dade to $355,000 from $274,500 a year ago, and by 18% in Broward, to $236,000 from $200,000. The activity in high-rises defied downward predictions after the collapse of the Champlain Towers South in Surfside.
Condo building tours and sales came to a halt for many real estate agents in the days after the June 2021 collapse. But months later consumer interest in buying condos resumed, indicating a determination to enter the market and a positive response to the county’s efforts to check the structural integrity of buildings with five floors or higher and at least 40 years old.
“Most people when they think of buying property, they’re thinking of a single property home,” Florida Atlantic University economist Ken H. Johnson said, regarding housing supply, “but in areas with greater density and properties that are more compact, you’ll see more condos” selling.
Luxury homes priced at $1 million or more also were in the spotlight in 2021, experiencing similar demand as homes priced below that level. In Miami-Dade, transactions involving million-dollar-plus houses increased by 19% last year for single-family homes to 262 deals and by 100% for condos to 264 deals. In Broward’s luxury home market, closings soared 31% for houses to 168 sales last month compared to December 2020 and by 12% for condos to 46 sales.
The appeal of luxury living in South Florida was so great in 2021 that in December a Chicago financier paid the highest amount ever for a single-family home in Miami-Dade County. Citadel hedge fund founder and CEO Ken Griffin bought a house on Star Island for $75 million.
The number of luxury sales this year will outpace that of 2021, said Danny Hertzberg, sales associate for The Jills Zeder Group. Transitioning from 2020 to 2021, he noticed that many families moving to the Miami area were mainly from the Northeast. However, starting this year, he said more prospective buyers are calling from California than states like New York.
Luxury sellers also will see more international buyers in the coming months with the lifting of pandemic-related travel restrictions in late 2021, Hertzberg said.
Prospective home buyers can expect similar upward pricing and minimal availability trends to continue this year. The entire Miami-Dade housing market, Jalil of Miami Way Realty said, will only get hotter in 2022.
“Prices,” he said, “will continue to increase, and spike the way they have.”
Anderson of I Heart Real Estate said: “It’s not like the ‘80s, when you saw a home, went home and thought about it.
“If you come back in the next couple of hours it’s gone,” she said. “I’ve had listings where a seller has an open house and before they can have it, they already have people bidding (on) it.”
This story was originally published January 23, 2022 at 6:00 AM.
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