South Florida real estate is just like any other real estate market in the world; it goes through highs and lows that are dictated by a range of factors.
Right now, South Florida real estate is experiencing a steady increase in value.
But what is the cause of the rise?
A recent Bloomberg study credited the growing real estate prices to the loss of local residents in major South Florida metro areas. The study found that the 58,000 Floridians who moved out of the region in 2018 are being replaced with more affluent buyers from North America and abroad.
Data compiled by Bloomberg and the U.S. Census Bureau show about 94 new people a day moved to Miami-Dade, Broward and Palm Beach counties from July 2017 to July 2018.
South Florida and Miami, in particular, continue to grow as an international destination that goes beyond vacations and beaches. The subsequent population increase of elite foreign-born and northerners means Florida locals must compete with cash-rich out-of-state buyers
This ever-growing presence is forcing land and housing prices to rise, while unfortunately for locals, wages remain stagnant.
Between 2009 and 2017, over 20 percent of Florida’s real estate buyers were foreign, and these buyers now spend around $8.7 billion on residential properties across Miami-Dade, Broward and Palm Beach counties (close to double what they spent in 2010).
North American switch
Florida has also become a recent hotspot for North Americans, claiming the largest domestic migration gain between July 2017 to July 2018.
Since President Donald Trump’s tax reform plan that capped the deduction of state and local taxes to $10,000 was initiated, wealthy North Americans have moved to Florida, a state which has no estate or state income taxes.
Miami real estate price rise
South Florida’s largest city, Miami, is the city at the forefront of the South Florida real estate increase.
Between April-June 2019, the median house price in Miami-Dade County increased for the 30th consecutive quarter – a staggering seven-and-a-half year consistent rise in price.
The average price for a median single-family home in Miami-Dade County rose 2.9% to $360,000 compared to the same time last year and existing condos increased 2.5% in the same time frame, from $240,875 to $247,000.
Miami’s condo market is particularly in demand at present. While the condo market did experience a cool down five years ago, buyer demand has remained strong since.