Miami-Dade Home Prices Are on the Rise Bucking National Trends

Home buyers in Miami-Dade County, Florida, are paying more for houses, even as their peers across the nation are seeing home prices fall. Buyers across Florida saw prices stagnate.

May marked the county's second straight jump in housing prices.

A single-family home cost $620,000 last month, up from $600,000 in April and $575,000 a year ago, according to figures released by the Miami Association of Realtors Thursday.

Statewide, median sales were flat compared with May of last year, according to Florida Realtors. The median sales price for a single-family home in Florida was $419,900, down from $420,000 a year ago.

And the jump in Miami-Dade is a stark contrast to figures released by the National Association of Realtors Thursday, which showed the largest year-over-year drop in housing prices nationwide since 2011. The median price for an existing home fell to $396,100, a drop of 3.1% compared to May 2022.

Jessica Lautz, deputy chief economist for the National Association of Realtors, stressed that housing prices are largely dependent on where you live.

"There is no national housing market," she said. "It's extremely local."

Experts attribute the increase to a basic tenant of economics, supply and demand.

Housing inventory in Miami-Dade county is low, while sales remain strong, said Eli Beracha, director of the Hollo School of Real Estate at Florida International University.

"We have limited construction, especially for single family homes and townhomes," he said. "It's very difficult to build here" because of limited space.

Most of the land conducive to new housing is already in use, and building high-rise apartments and condominiums is expensive, especially with high interest rates, Beracha said.

Miami-Dade has a 3.3 month supply of houses and a 5.1 month supply of condos, according to the realtors association. A balanced housing market has a six to nine month supply.

The mismatch created by the low supply favors sellers over buyers, experts say.

Miami-Dade County's population grew during the pandemic as remote workers moved from other cities and stayed after the pandemic subsided, Beracha said.

"Unlike people who moved to places like Boise, Idaho, and said, 'well, it's nice here, but now I'm moving back to L.A.," he said.

Major employers also moved to Miami-Dade County in recent years. The hedgefund Citadel, for example, uprooted its headquarters in Chicago and moved to Miami last year.

And the region's population continues to grow even as COVID fades from the headlines, creating a high demand for housing, Beracha said.

Miami-Dade County has many of the traits that home buyers seem to be looking for, Lautz said.

"We're seeing strong migration flows into places that are warm and have great tax benefits," Lautz said.

The rest of Florida, however, is not seeing the same strong demand, Florida Realtors Chief Economist Dr. Brad O’Connor said in a news release.

High interest rates are pushing mortgage rates higher and dissuading Floridians from looking for new homes, he said.

“The monthly number of closed sales of existing single-family homes in Florida – and throughout the rest of the U.S., for that matter – has eroded ever since mortgage rates started going up a little more than a year ago,” O’Connor said.

Those same high interest rates are also putting a damper on new housing construction, he said.

If the rise in prices continues, more people will be priced out of the county's housing market, warned Alex Horenstein, a professor and financial economist at the University of Miami.

"People are already priced out," he said. "And it's harder and harder to own a house even considering the increasing in salaries."