Good News for Miami!

Goldman Sachs recently published a paper called “Getting worse before getting better” in which researchers said that, nationally, home prices are going to see a downward correction in 2023. With the Fed increasing interest rates to combat inflation, mortgage rates have gone up and therefore real estate sales have slowed over the last quarter. I keep telling my buyers and anyone else who will listen that 6% interest for a 30 year fixed rate mortgage is not unusual and, in fact, used to be seen as a low rate! However, we all got used to 2%-3% rates, so doubling those numbers has decreased buyers’ purchasing power. With all of that said, prices are going down nationwide.

The good news for us, though, is that per the aforementioned Goldman Sachs piece, Miami’s housing prices are supposed to stay strong and actually increase by a projected 0.8% this year. This is huge because we are one of only two areas in the nation that is expected to have an increase – ever other market is expected to see a decline! People are still moving down to South Florida for a variety of reasons: no state income tax, great weather, easy access to South America, corporate transfers by companies relocating here, and more. With the steady demand for homes that we are seeing, our market can support a price increase.

Since the onset of Covid, people have been asking me whether we are sitting on a real estate “bubble,” and it just has not felt like we are here in Miami. While it looks like higher interest rates and lower demand will cause a downward shift in most markets, our genuine pool of pent-up demand has homebuyers ready to act.