Miami-Dade home prices hit new high, crushing American Dream for many people
Hollywood resident Anthony Nunziata started looking for a South Florida home to buy for his family in July 2021. Unsuccessful nine months later, he’s giving up and looking for another rental house.
The story of Nunziata, his wife Carolina Penafiel and their son Santino Nunziata-Penafiel is all too familiar for area residents dealing with what the Miami-Dade County mayor this month called a housing affordability crisis. Real estate industry and academic experts, as well as let-down homebuyers, already had reached that conclusion.
“The American dream’s been sold to me my whole life and it’s not there anymore,” the New York City transplant said of making homeownership a reality. “No one gives a s---. Local government doesn’t care and state government (only) cares about passing the critical race theory and ‘don’t say gay’ bills.”
The median sales price of single-family homes in Miami-Dade increased to a new monthly high for March of $540,000, up from $536,000 in February and $491,250 a year ago, according to an existing home sales report released Wednesday by the Miami Association of Realtors. Meanwhile, the median price of condos sold last month in Miami-Dade was $400,000, a big jump from $305,000 in March 2021.
In Broward County, the median sales price for single-family homes was even more expensive at $545,000. That’s an increase from $519,000 in February and $445,000 a year ago. Condo prices also ticked up to $238,500, from $210,000 last March.
Coldwell Banker Realty regional vice president Nancy Klock Corey attributed the continued surging housing prices in the region to an influx of residents from other parts of the country and the world.
“It’s a lot of people’s dream around the country to live in Florida, particularly in South Florida,” she said. “My experience is once the buyers decide they don’t like the prices anymore, then they stop buying.”
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Housing affordability has long been a concern for Corey because of Miami’s slow response to implementing public transportation options. Many people lack transportation to the city’s primary business centers and can’t afford to live in the same communities in which they work.
“We’re a city that grew so fast that we didn’t do a great job in mass transit,” she said. “Even though we have some in place, we haven’t really had the adaptation to those systems that you’d expect. The most affordable properties are away from the center of major hubs.”
Miami Dade College professor James Spann has worked as a real estate and mortgage broker for years and remembers a time when Miami had more space for development than it does today. He thinks the city’s rapid development has created a demand for homes but little land to build them.
“Our market will continue to fill itself, until it’s ready to burst at the seams,” Spann said. “The only thing that has slowed us down a little bit is a lack of inventory. Miami is becoming the area where things go up fast. There’s a need for additional residential housing (and) that’s going to drive the price up.”
In March, Miami-Dade had the equivalent of 1.7 months of supply of single-family houses available for sale. In Broward, it was a mere 1.1 months of housing inventory. Usually, a balanced housing market has 6 months of inventory, experts say.
As the Federal Reserve finally raised its benchmark interest rate last month for the first time since December 2018, lenders in turn boosted rates on 30-year mortgages. That made monthly mortgage payments greater for new buyers and likely added another hurdle for people aspiring to buy a house. But one bump in interest rates proved no match for the overheated South Florida housing market.
Qualified prospective buyers can lock in a 30-year mortgage carrying a 5% interest rate, according to the latest Freddie Mac data. A year ago, the interest rate on the same home loan stood at 3.44%.
Sofia Johan, associate professor of finance at Florida Atlantic University, said mortgage rates remain low enough for buyers borrowing money to buy homes.
“People expect interest rates to go up,” Johan said. “People are starting to realize as interest rates go up, if they don’t lock in those rates today they don’t know what’s going to happen in a year or two from now.”
The FAU finance professor thinks unhappy house-hunting residents like Nunziata can expect to see a turning point — although when is unknown.
“The supply is so low that the prices become severely inflated. It doesn’t make sense for many buyers,” Johan said. “The question is when. We don’t know how much wind there is behind this push.”
For now, Nunziata is looking for another rental home for his family. He’s hesitant to compete to buy one of the many Miami houses that continue inflating in price with no clear end in sight.
Nunziata is vice president of asset management and development for a family-owned real estate investment trust. Penafiel has a part-time job transporting tourists in Miami Beach. Nunziata took a pay cut by moving in 2020 to South Florida, where he earns $100,000 a year, with up to $25,000 more in bonuses. While he earns three times the average salary in Miami-Dade, he still can’t afford the type of house he wants for his family.
“We are 99.9% renting (again) and I’m just keeping my eye open just in case,” he said. “With the way the market is moving, if a true deal pops up, I’m going to be one of 60 people competing for it.”
This story was originally published April 20, 2022 at 7:58 PM.
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