Welcome to the slowdown.
Miami’s residential real estate market has cooled off significantly over the last year. But it’s not crashing and that’s a sign of stability, according to a quarterly report from brokerage Douglas Elliman and New York-based Miller Samuel Real Estate Appraisers & Consultants.
“This market has never had stability,” said Jay Parker, Florida CEO of Douglas Elliman, of the region’s perennial boom-and-bust cycles. “We have gone through tremendous growth over the last few years. It’s just natural that it will start to calm at that point. … But it’s not leading to an implosion. It’s leading to a market that is more sustainable.”
We’re shifting to a buyer’s market, and sellers may have to adjust their expectations. Jay Parker
The report found that in the second quarter of 2016, the number of home sales fell 25 percent in Miami Beach and the barrier islands compared to the previous year. In greater downtown Miami and its major suburbs, sales were down 12.5 percent annually. Even so, they stayed above historical averages.
Those numbers cover both condos and single-family homes. The Miami Beach market includes Sunny Isles Beach, Bal Harbour, Bay Harbor Islands, Key Biscayne and Fisher Island. The Miami market includes Aventura, Coral Gables, South Miami, Pinecrest and Palmetto Bay.
Sellers are having a harder time unloading properties in today’s market: The number of active listings jumped in both Miami and Miami Beach, as did the number of days homes are staying on the market.
Prices haven’t come down yet in many areas, but that trend can’t continue, Parker said.
“We’re shifting to a buyer’s market, and sellers may have to adjust their expectations,” he said.
25 percent Decrease in home sales volume in Miami Beach
Median sales prices rose to $280,000 in Miami (up 7.7 percent annually) and to $435,000 in Miami Beach (up 2.4 percent).
The sales slowdown is mainly the result of a strong dollar and weak economies abroad. After the recession, foreign buyers took advantage of a struggling dollar to scoop up Miami real estate, fueling a frenzied boom. Now that the currency situation has reversed, they can’t compete at the same level.
Broward and Palm Beach counties, which rely less on foreign buyers, generally did better, the report found.