Miami real estate: What buyers and sellers need to know

Florida, known for its scorching temperatures and vibrant culture, has become the most sought-after state for movers in 2022 according to the National Association of Realtors. Miami, one of Florida’s largest and most beloved cities, boasts stunning beaches, a thriving nightlife, and a rich local culture. If you’re considering buying or selling a home in this dynamic city, here’s a comprehensive guide to the state of Miami’s real estate.

The Unique Miami Housing Market:

Miami’s housing market is distinctive in several ways. A significant portion of the city’s occupied housing units is rented, with renters making up nearly 70 percent of the population, as per U.S. Census data. This means only around 30 percent of residents are homeowners.

Real estate investors play a significant role, with many owning properties associated with tourism and vacation rentals. Notably, foreign investors accounted for 17 percent of home sales between August 2021 and July 2022, with a third of them paying in cash. Recent legislative measures aim to regulate foreign nationals’ property purchases in the state.

Market Trends and Insights:

While home prices are declining in many parts of the country, the Southeast, including Miami, is experiencing a surge. Redfin data shows that the median sale price in Miami increased by 7.5 percent from April 2022 to April 2023. However, homes are staying on the market longer, with a median of 66 days compared to 49 the previous year. Additionally, the number of homes sold has decreased by a significant 41 percent year-over-year.

According to Meghan Maloof Berdellans, a broker at Interealty Exchange, “The market is at a very interesting place right now.” Sellers still have an advantage, although it has cooled down from the previous summer. This indicates that it’s still a favorable time to sell a house in Miami, though buyers have more breathing room than before.

Living in Miami:

While Miami offers a plethora of attractions, there are some crucial factors to consider before making the move:

1. High Cost of Living: Miami, like many tourism-centric cities, comes with a higher cost of living compared to both the rest of Florida and the U.S. If you’re moving from a more affordable location, be prepared for a potentially higher expenditure.
2. Property Taxes and Insurance: Miami’s median home price in April 2023 was $575,000, considerably higher than the national median of $388,800. Additionally, property taxes and insurance rates in Miami are notably higher due to weather risks like hurricanes and a higher incidence of insurance fraud.
3. Flood Insurance: Given the local real estate laws, sellers are obliged to disclose if a property is situated in a flood zone, indicating that separate flood insurance may be necessary.
4. Sales Tax: Miami-Dade County imposes a 7 percent sales tax. However, Florida offers the benefit of no state income tax for individuals.

Popular Miami Neighborhoods:

Miami boasts over two dozen distinct neighborhoods, not counting nearby municipalities. Here are some popular options:

• Coral Way: Offers a quiet, residential feel close to downtown action.
• Downtown: A vibrant neighborhood with cafes, shops, nightlife, and parks.
• Coconut Grove: A green, historic area with a laid-back vibe and an active community.
• Wynwood: Known for its booming art and fashion scenes, lined with murals, galleries, and trendy establishments.

Miami Real Estate Agents:

Whether buying or selling, having a knowledgeable local real estate agent can be invaluable. They assist sellers in determining their home’s value, listing the property, negotiating offers, and guiding the sale to completion. For buyers, agents help determine affordability, locate the right property, and navigate the offer and closing process.

Alternative Selling Options:

In addition to traditional sales, there are alternative options in Miami, including:

• Cash-homebuying companies: Offer quick cash and fast closings, but may not provide top dollar for your property.
• iBuyers: Quick cash offers and expedited closings, but typically at a discount from market value.

Considering a Move to Miami:

For those planning a move, it’s crucial to get finances in order and obtain preapproval for a mortgage. This not only helps in budgeting but also signals to sellers that you are a qualified buyer. Hiring a reputable real estate agent is the next step, ensuring they have local expertise and can help you find a property that suits both your budget and lifestyle.

Conclusion:

Navigating the Miami real estate market requires a nuanced understanding of its unique dynamics. With a high demand for rentals, significant investor presence, and a fluctuating housing market, both buyers and sellers need to be well-informed. By considering the cost of living, property taxes, and insurance, you can make an informed decision about your move to this vibrant city. With the right real estate agent by your side, you’ll be well-equipped to navigate the Miami market and find the perfect place to call home.