REAL ESTATE
a rough ride for the next year or two years.
WHERE ARE MARKET-RATE RESIDENTIAL SALES AND RENTALS HEADED?
Question: How will the 2023 market-rate sales and rental market differ from 2022?
Jack McCabe: Singlefamily homes are going to continue to escalate in price. For those who own a single-family home, some say to sell, but I’d hold on. There will be more demand and very limited supply. That’s what always pushes prices up.
Multifamily buildings for sale will go down. We’ve seen new condominium sales prices decline for the past 10 months. It is a trend. That is going to continue. We’re going to see things transition into a buyer’s market.
Q: What are long-term solutions to our housing crisis and how can we make progress in 2023?
McCabe: It has gotten to a crisis point. It’s forcing a good chunk of our labor force to move out or drive 60 to 90 minutes each way to work. I hate to see people getting forced out, because the rents are getting jacked up.
I’m a big proponent for rent control. It is very needed, because we’re seeing people getting priced out even of their apartments. With sky-high rents it makes it impossible to afford anything. You’re living paycheck to paycheck. Unless you hit the lottery, it makes it nearly impossible. There have been rent controls legislated in several cities around the country. It’s necessary here as well. Currently, you’re having to settle for less and driving from much further away to work and recreation.
AAQ: Miami-Dade has a median sales price of $550,000 for a single-family home and $395,000 for a condo, according to the November market report from the Miami Association of Realtors. Where can residents find houses and condos to buy below the median?
McCabe: For a condo, you’re looking in an older building northwest or south of the downtown marketplace, Doral, possibly. Hialeah Gardens. Miami Lakes. There’s probably a good chance you can find something in those areas, but nowhere near the ocean.
If you’re a family looking for a house, you’re looking at the western edge or southern edge of the county, nowhere near the heart of the city. Q: Many natives and residents reconsidered their long-term plans of buying and continuing to live in Miami-Dade after 2022 due to the housing crunch. What will happen with year-over-year housing and condo prices and demand in 2023?
McCabe: Over the next couple of years we’re going to see some corrections. It will benefit those looking to buy and those looking to rent. Will we see 50% drop? No. Is it going to flatten out? Yes, that’s realistic. It may be over this year and next year. When markets change, prices are the last thing to change. It’s going to take a little while before we see noticeable differences in prices. It will get to where more average income folks can take out mortgages and buy a property. They may have to readjust what they see as the American dream and what the reality is for them in Miami.
AAWHAT DO YOU FORESEE IN THE LUXURY SLICE OF THE MARKET?
Question: How will the 2023 luxury market differ from 2022? Ana Bozovic: Luxury condos saw a 540% increase in sales when comparing activity from January through November 2022 to January through November in 2019, before the pandemic began. Miami-Dade had 192 sales, up from 30 for those priced over $2,000 a square foot. It also had 85 single-family home sales in that time, up from 10 sales for houses priced above $2,000 a square foot, a 750% increase. This reflects the appetite and buying power of people coming in. They’re used to paying more per square foot. They are part of the wealth migration coming down here. While that initial COVID-19 surge is waning in terms of luxury sales activity, the trickle of people spending top dollar is continuing.
Q: Luxury sales activity slowed in 2022 due to concerns with cryptocurrency and the stock market.
AAWhat economic factors will influence luxury home buyers the most in 2023?
Bozovic: Our market for homes priced over $1 million market is heavily cash buyers. They are cushioned from interest rates and general economic uncertainty. But, when the wealthy feel less wealthy, they spend less.
Q: Where will milliondollar home buyers look to buy a house or condo in Miami-Dade in the new year?
Bozovic: We are seeing people relocating with their families. Schools are a major factor. Miami Beach — Sunset Islands, Palm Island, Star Island, Hibiscus Island — and Coconut Grove will remain top places. Prices for dry lots, especially in waterfront locations in Miami Beach, have shot up. It’s like buying the land for a brownstone in front of Central Park a century ago. You bought waterfront on Hibiscus or Palm 30 years ago, cool that was nice. You looked out the window. There was no skyline. Now there is.
Downtown Miami and
ABrickell will be top places for condos. None of these places are that far from one another. People are showing strong preferences toward quality projects and that’s wherever it can be built. Quality means modern with brand recognition and a star architect.
Q: What will be the biggest change or trend in the luxury market in 2023, and what trickle-down effect will that have on the local economy?
Bozovic: Sales volume of homes over $1 million will continue to slow down as it has in 2022.
AWHAT DO MIAMI-DADE POLICYMAKERS PLAN TO DO TO EASE CRISIS?
Question: How will the 2023 housing market differ from 2022?
Michael Liu: We are still going to see significant demand across the board both for rental and homeownership. There is going to be a lot of stress on the home ownership side. From a macro perspective, I see a stabilization in 2023. Interest rates, the war in Ukraine and energy costs are going to make the ability to buy more difficult. Even though there is a significant number of foreign buyers in Miami-Dade, the majority of buyers in this market still have to rely on financing. I don’t see the Fed cutting back on interest rates. We might see some decline in the second or third quarters.
In the rental market, there are similar pressures on developers and renters. I do see toward the end of 2023 a stabilization of the rental market. We’re going to see less of the skyrocketing annual increases of 30%, 40% and 50%, since there will be more available units coming into the market by the end of the year.
Q: What are the longterm solutions to the Miami-Dade housing crisis and what would progress
AAentail in 2023?
Liu: Forging ahead on our new partnerships and finding land that hasn’t been used for housing and keep pushing the ball in the right direction, so that more land can be put into the pot. And we have to find major employers in the county, whether it be in hospitality or in retail, they need to stand up to the plate and provide assistance to help their employees afford housing.
Government can’t do it all. The private sector needs to step up to the plate. Finally, funding sources need to come up with new products to fund affordable and workforce housing that doesn’t rely on county funding. U.S. housing and mortgage financing entities like Fannie Mae and Freddie Mac they have to come up with products that can support the development of workforce housing. My hope is that the silver lining with a high interest market is these entities will work on products to produce more affordable and workforce housing.
Q: Where is the county looking to develop more affordable and workforce housing in the new year?
Liu: We are going to see some unique and interesting developments down south, especially in Cutler Bay, Homestead and Palmetto Bay and in Florida City.
Q: Many essential local workers have left Miami-Dade during the pandemic due to the rising cost of living and housing expenses, and small business owners said they struggled to fill open positions. Will this trend continue in 2023?
Liu: We’ll still have challenges. Small businesses will continue to be challenged in finding the kind of workforce they need.
AARebecca San Juan: 305.376.2160, @rebecca_sanjuan