What’s not to love about Miami? The Magic City continues to draw people, both domestic and foreign. With great weather all year round, walkable streets and beautiful beaches, it’s not difficult to understand the draw. Miami is also a city rich with culture and entertainment.
In the retirement hotbed of Florida, Miami is an especially popular location for retirees. With the highest percentage nationwide of people 65 years and older, it’s no wonder there are a number of thriving active adult communities. Miami is a city with bountiful opportunities for recreation and culture, such as the museums, beaches, golf courses, and waterways.
Miami has always drawn people with its beaches, low taxes and tropical climate. But with hurricane Irma hitting the city last September, what does the housing market look like for 2018?
Current Real Estate MarketDespite the hurricane, rebuilding is going well and the forecast for the spring is looking positive. There was a dip in the luxury home market during this winter, but it should rise back to the average price of $392k. Zillow’s report predicts that by the end of 2018, the average price of a house will be up to $221k, detached houses up to $230k, and condos up to $169k. These prices are a relative bargain when you look at other markets like L.A., San Francisco, and Seattle. The strong U.S. economy, and Miami’s growing tourism and strong employment are all factors boosting the market. South Florida overall is looking like a great market for buyers.
The Miami real estate market saw a 4.7% boost last year, compared to the country-wide boost of 6.5%, but the market is still hot with low supply and high demand fueling gains.
Is South Florida ready to boom?After a slow year, now is the time to invest in South Florida property. 2017 saw an oversupply of luxury inventory. Through 2018, the prices on luxury property will likely stay flat as that inventory is absorbed, but afterwards there could be an increase in price, making 2018 the ideal time to invest. With softened prices, sellers and developers offering reductions, and a lack of new construction, it looks like South Florida could be entering a real estate boom.
The new tax bill is going to make Florida a more appealing location than ever. States that will be hit hard by the tax bill such as New York and California may lead people to flock to places like Florida, where the no tax status will stretch their dollars. Florida has no income, inheritance, or estate taxes. And as Miami is already a retirement hotbed, it will continue to draw the huge population of retiring baby boomers looking to avoid taxation.
While Miami is a premier spot, buyers should also consider looking north where they’ll get more bang for their buck. Fort Lauderdale is growing in popularity as a unique, vibrant city with higher quality of living than Miami. Boca Raton is also looking to be a great place to invest.
How long will the housing market stay afloat?The same beautiful, tropical weather that draws so many people gets sweltering in the summer with an average high of 91% in July and August. Many people, given the moniker “snowbirds”, chose to migrate to Miami in the winter from colder locations. Those who live there year round don’t just have to face the heat, but the fact that Miami is in hurricane country, and need to be prepared for storms. Additionally, the majority of people do not consider the rising sea level as a factor in their property acquisition. The fact is that the sea level will continue to rise, affecting all coastal markets.
Miami also has a high cost of living, at 10% above the national average. The disparity between cost of living and income is unfortunately driving out a portion of the native Miami population. Net domestic migration has dropped 2,670 percent since 2010.
Overall, South Florida looks ready to boom, and now is a great time to hop on properties before prices balance and rise. At the same time, the future of all coastal real estate markets is threatened by rising sea levels, and Miami’s decrease in domestic migration points to issues of affordability.