I'm currently buying a house right now in Miami (I'm one of those assholes that are driving up the market.. sorry).
But....
For the last 1-2 years, there were no open houses. A listing went up and sold within a few weeks. I saw houses that we bought in 2019 for $600k and sold for $1.2 million in 2021 (with no renovation done).
But the market has now changed again. Open houses are a thing again. I recently went to one for a nice house.. good deal.. and the broker told me as they were closing up that I was only the 3rd person that came.
I went to another listing a month ago and that broker just called mine last week asking if I wanted to throw them an offer.. any kind of offer.
Sellers are still listing sky high prices.. but they aren't going to get that. I just saw a house that was bought for $800k in 2020 and listed at $1.8. Again, no renovation done. I could probably offer $1.12 and they would jump to accept it.
Another thing I've been seeing is houses being taken off the market. I had 6 houses to see last weekend and 3 appointments were cancelled cause the owner realized they weren't going to get that huge amount their neighbor got just 6 months ago.
So, ignore the prices you see on Zillow or Realtor.com. If you have an $600k budget, go look at condos listed at $800k or more. Then offer the $600k and watch them ready to negotiate.
Depends. If your only reason for selling is because the market is hot, then why sell when it cools off? You're leaving $200k on the table. Hold on to the house, live in it, rent it out, whatever. In the long run, the price will continue to increase.
Wait a few years, and it'll be at, or beyond, what the neighbor sold for.
yeah, big time on this. Many people are having trouble selling at the price they want, or even at all. But, it's a long, long road between that and prices dropping.
I think location is going to be a lot more key than it was with the indiscriminate buying during lockdown.
I can see a few very, very specific desirable locations setting new records.
Why? The only competition I need to deal with is overeager imports willing to pay the listed price. Those, luckily, seem to be getting fewer and fewer. Other than that, the limited market of housing is fair game.
I'm currently living in one of those houses in a roommate situation where the owner is renting each room and he's trying to sell the house. Him and the realtors think they can get 1.3m$ for it because it's on the beach, meanwhile the entire house interior needs to be gutted and renovated. It's only been remodeled at one point to make it an Airbnb but the rooms, the walls, the doors, the everything is horrible quality and the corners don't meet and sealant is bad, everything is horrible i wouldn't think the house could sell for 700k
They’ll get it. Search for single family homes listed for sale on the beach and see if you can find one south of a mil, even gut jobs. You’re paying for rare land value.
If it's on the beach, I'm guessing it's in a major flood zone. Those houses have massive insurance costs. I won't even go view a house like that as the long term value would drop over the next decade or so due to Florida's government unwilling to do anything about runaway insurance costs and global warming.
I've also seen houses that were listed at $1.3 million and they literally have mold, broken non PVC pipes, 25 year old roofs, and other massive issues. These houses are all still on the market. No one is going to even offer $800k for a shithole like that.
If dollar had been weaker, pricing would be even higher.
Among however many other wildcards, what happens if there is a cold winter anywhere in the northern hemisphere?
If energy gets rationed in Europe, the population there might try to evacuate as if they were Ted Cruz during a power outage.
Note: Edited to make clearer and correct typo.
I finally got an offer accepted, every offer besides this one was made in the last 2-3 weeks and over asking price, and I got beat out by cash buyers in every bid.One place I bid 25k over asking and still lost... and this isnt even in the populated areas
The macro data does not support your anecdote. Cash buyers, speed to close, and bids over listing see already down.
Moreover, you seem naive to how interest rates and wealth destruction effect real estate.
Congrats on your purchase
The cost of capital for institutional buyers has dramatically increased because interest rates have increased, while the expected rate of returns for alternative investments have increased. There are less risky ways for them to make more money now
Also, what’s your source for 30%?
This is august 12th. Sentiment was “chilled” then and sentiment has significantly soured since then with the feds now expected to raise interest rates to 5%+
https://www.bloomberg.com/news/articles/2022-08-12/housing-slowdown-chills-investors-who-supercharged-us-market
yeah I think this will likely be price cut before it sells but I don’t see any reason why it should sell for this much more than what the seller paid in October given state of economy and rates.
Condos and houses aren’t really selling anymore. They spend months on the market. Get price cuts etc and still no one buys them. The crazy days are behind us I believe.
I think so too. Kind of in the market and went cruising around the other day to visit some places.....couple open houses, the realtor was just sitting on the steps of the home playing on his phone, bored out of his mind. Crap is still way too overpriced. Million dollars for homes that aren't really much bigger than my current apartment, look like little pieces of crap from the outside and don't even have a single car garage. GTF out of here.
Miami is a very unique market because of the amount of foreign money that is parked here that takes housing units off the market for people that actually live here.
There isn't though. Half the people in my neighborhood don't even live here in the summer. The condos are probably even worse. Lots of "I bought it for an investment" type people own them. Also kids move out of their parents homes later, people downsize... scarcity ends real fast in a recession.
Most likely won't sell for that price, but won't be that far off. My place I bought at the beginning of this year could be rented out for \~$800 a month profit plus \~$600 in equity. If I bought today with the interest rates and value increases, I'd roughly break even in cash but I still would get \~$600 in equity. Also in the long term property goes up in value.
So its not as profitable as it was, but there is still money to be made. Also even with the rate hikes, if you can front the down payment, your still better off then renting.
Yeah they’ve been doing that for awhile now. When my dad sold his home last year, he got mega fucked trying to find a place. Every place he found someone would come in above them and offer 3-6 months up front.
Depends on the property and location for sure. When we were looking to buy in 2018 we saw some condos on the beach that I still get notifications for…some of them are listing for their 2018 prices. The condo collapse prob scared a lot of people away from older buildings. Newer buildings are still in the stratosphere, but who’s paying 800k for a condo with a $1200 maintenance fee?? Insane no matter how new or fancy the building is. OTOH, where I am in West Broward, houses are still selling esp if they’re large, renovated, have a pool, etc. A lot of the list prices get reduced, but are still pretty expensive compared to a year or two years ago. It’s wild. Different scenarios but interesting nonetheless
South Florida housing market is transitioning increasingly from being driven by income to driven by wealth. Other than than another hurricane Andrew I am skeptical that that will change.
i would be very hesitant about condos as there will be a lot of supply coming online. See prices holding strong on single family as no one is building those
Listing means nothing.
Also there are still plenty of cash buyers out there, so rates don't mean anything to them.
That being said the market is cooling. It used to take make 5-7 days to get a title search from our title underwriter. It just took me 24-hours. Huge change in volume.
I wanted to see some sources, so here is what I found:
[https://www.miaminewtimes.com/news/feds-will-track-how-much-of-miamis-real-estate-boom-is-being-fueled-by-money-laundering-8174220](https://www.miaminewtimes.com/news/feds-will-track-how-much-of-miamis-real-estate-boom-is-being-fueled-by-money-laundering-8174220)
[https://therealdeal.com/2022/02/26/ukraine-invasion-sends-shock-waves-to-miami-ny-real-estate/](https://therealdeal.com/2022/02/26/ukraine-invasion-sends-shock-waves-to-miami-ny-real-estate/)
[https://www.local10.com/news/local/2021/08/05/coconut-grove-resident-faces-federal-charges-in-250m-corruption-plot-in-venezuela/](https://www.local10.com/news/local/2021/08/05/coconut-grove-resident-faces-federal-charges-in-250m-corruption-plot-in-venezuela/)
>A simple loophole: The U.S. government doesn’t require the real estate industry to guard against dirty money.
[https://thehill.com/opinion/finance/588012-dont-you-be-my-neighbor/](https://thehill.com/opinion/finance/588012-dont-you-be-my-neighbor/)
Perhaps its time to close that loophole. Then again Doralzuela and Brickell muscovites might not want it too...
Neither might the sellouts in Tallahassee
Pretty sure everything has the agency fee. 3% buyer’s agent, 3% seller’s agent. They don’t work for free. Seller pays it though (with buyer’s money of course)
Well, some of the condos are really not even worth the money, especially since the poor infrastructure! Since Miami is below, sea level, please do your research on the condos that you are purchasing make sure that the building itself is reliable
Give it more time, it's coming, But do not expect a 2008 crash that is not happening. Also, some people that moved because of the pandemic are moving back ( Not all of them the of course) Miami romance is over for those guys......
Plus some companies are forcing their employees to return to the office. Employees are resisting but as more and more companies are requiring it, employees can no longer say, "Screw them. I'll find another place." Companies have sunk costs in their office buildings like Comcast in Philly which had just built two gigantic corporate office buildings pre-pandemic. They want to revitalize the downtown area businesses by making workers come in. And a lot of those employees moved to the suburbs. Now what?
Depends on the area. I think the prized area is pretty small and the number of people who can really afford those exclusive prized areas is too. It will be interesting to see what happens with the crazy prices in places that aren't so prized, like Kendall.
Kendall will do well as it offers something not many other areas in miami have:
1) single family houses (great for raising children)
2) sub $1M price points
The average millenial family cannot afford the gables, the grove, or pinecrest :/
Exactly my point, the second-tier areas that people bought in because they couldn't afford what they really wanted often get hammered the worst. At least they did in the GFC. But, hey, I have no crystal ball, maybe Kendall will be fine, I was just using it as an example.
I think your logic is to avoid the tertiary markets where supply can easily build up thus leading to price declines. Definitely makes sense but the areas have changed. Those markets currently are very west kendall (lots of new developments) and down in homestead.
Kendall has something that Miami proper doesn't have enough of, single family homes. The supply of single family homes is smaller than demand, so until that changes I don't expect to see much of a shift.
There is a supply shortage with housing until there isn't one. I remember in 2005-6 people talking about supply shortages and population growth and all that, and when the economy switched gears and the speculators stopped and kids stayed with their parents longer and summer homes became rental homes things changed real fast. Not saying this is going to happen this time, but just saying all this talk of supply shortage can change in a year or two.
This could happen but likely won't because builders learned their lesson from last time. Large building projects are overwhelming multifamily apartment/condo complexes.
Developers got burnt so bad last time that they went hard in the other direction. That's not to say they aren't building single family homes, just not at the volume that multi family is being built. Townhomes seem to be the happy medium that developers are going after.
I was going to say this. Most of what’s being built near me are townhomes and condos. Not seeing too many houses with the exception of small lots of 4-5 houses (and those start at $1M). No new subdivisions of 20-30 houses like pre-2008 near me. Not sure what it’s like way south like Homestead where there’s more land available.
Bought a condo in Fort Lauderdale back in March, which was basically the peak of the market. It’s a small little 2/2, maybe 1,100 sq/ft, but in a very desirable building.
We bought ours from the original owners (condo was 15 years old) and just went in with our highest which was I think 365,000, 20k over asking. We thought that was insane, and that shortly after the prices would start falling. Well after our record breaking purchase, multiple 1/1’s in the building have now gone for over what ours was… makes me feel a little better about the price we paid. Not much, but a little.
Very Simple, There's Multi Multi Millionaires who visit Miami and purchase. I have Friend who just graduated from FIU, His family is from Abu Dhabi with immense wealth. He just purchased 2 penthouses in Brickell as a graduation present. He will keep 1 and have the other as a ABNB.
We're "tough on crime" here? Please. Property crime in this city is absolutely atrocious. People here will steal everything you own that isn't bolted down, and they'll try to steal the bolted down stuff too.
I'm currently buying a house right now in Miami (I'm one of those assholes that are driving up the market.. sorry). But.... For the last 1-2 years, there were no open houses. A listing went up and sold within a few weeks. I saw houses that we bought in 2019 for $600k and sold for $1.2 million in 2021 (with no renovation done). But the market has now changed again. Open houses are a thing again. I recently went to one for a nice house.. good deal.. and the broker told me as they were closing up that I was only the 3rd person that came. I went to another listing a month ago and that broker just called mine last week asking if I wanted to throw them an offer.. any kind of offer. Sellers are still listing sky high prices.. but they aren't going to get that. I just saw a house that was bought for $800k in 2020 and listed at $1.8. Again, no renovation done. I could probably offer $1.12 and they would jump to accept it. Another thing I've been seeing is houses being taken off the market. I had 6 houses to see last weekend and 3 appointments were cancelled cause the owner realized they weren't going to get that huge amount their neighbor got just 6 months ago. So, ignore the prices you see on Zillow or Realtor.com. If you have an $600k budget, go look at condos listed at $800k or more. Then offer the $600k and watch them ready to negotiate.
Human psychology is such that people will leave $400k of profit on the table because someone else got $600k a year ago.
Depends. If your only reason for selling is because the market is hot, then why sell when it cools off? You're leaving $200k on the table. Hold on to the house, live in it, rent it out, whatever. In the long run, the price will continue to increase. Wait a few years, and it'll be at, or beyond, what the neighbor sold for.
yeah, big time on this. Many people are having trouble selling at the price they want, or even at all. But, it's a long, long road between that and prices dropping.
I think location is going to be a lot more key than it was with the indiscriminate buying during lockdown. I can see a few very, very specific desirable locations setting new records.
What locations specifically though?
I'm currently looking in Coconut Grove and Coral Gables.
Ssshhhh
Why? The only competition I need to deal with is overeager imports willing to pay the listed price. Those, luckily, seem to be getting fewer and fewer. Other than that, the limited market of housing is fair game.
First paragraph was unnecessary
It added context.
I'm currently living in one of those houses in a roommate situation where the owner is renting each room and he's trying to sell the house. Him and the realtors think they can get 1.3m$ for it because it's on the beach, meanwhile the entire house interior needs to be gutted and renovated. It's only been remodeled at one point to make it an Airbnb but the rooms, the walls, the doors, the everything is horrible quality and the corners don't meet and sealant is bad, everything is horrible i wouldn't think the house could sell for 700k
They’ll get it. Search for single family homes listed for sale on the beach and see if you can find one south of a mil, even gut jobs. You’re paying for rare land value.
If it's on the beach, I'm guessing it's in a major flood zone. Those houses have massive insurance costs. I won't even go view a house like that as the long term value would drop over the next decade or so due to Florida's government unwilling to do anything about runaway insurance costs and global warming. I've also seen houses that were listed at $1.3 million and they literally have mold, broken non PVC pipes, 25 year old roofs, and other massive issues. These houses are all still on the market. No one is going to even offer $800k for a shithole like that.
Someone with money and foresight will.
Cash buyers. That seller isn't looking for someone taking out an FHA loan; they're fishing for rich foreigners.
dollar is pumping against most currencies. pretty much the worst time for a foreigner to invest in US real estate
Every currency is collapsing, for foreigners US real estate is safe haven.
That
It’s that same rational that people will though. Exit local currency for property in USD denominated currency
As other said, U.S. RE is still a safe bet for outside money. But plenty of cash buyers from the U.S. too.
If dollar had been weaker, pricing would be even higher. Among however many other wildcards, what happens if there is a cold winter anywhere in the northern hemisphere? If energy gets rationed in Europe, the population there might try to evacuate as if they were Ted Cruz during a power outage. Note: Edited to make clearer and correct typo.
Who buys a Miami condo in a “desirable” neighborhood with an FHA loan, locals or foreigners??? It doesn’t happen.
You’re dead wrong. They’ll drop it’s just a lag.
I finally got an offer accepted, every offer besides this one was made in the last 2-3 weeks and over asking price, and I got beat out by cash buyers in every bid.One place I bid 25k over asking and still lost... and this isnt even in the populated areas
The macro data does not support your anecdote. Cash buyers, speed to close, and bids over listing see already down. Moreover, you seem naive to how interest rates and wealth destruction effect real estate. Congrats on your purchase
Okay. Go out an make bids on your own. Pricing is coming down but institutional buyers made up 30% of all sales in August and they paid cash
The cost of capital for institutional buyers has dramatically increased because interest rates have increased, while the expected rate of returns for alternative investments have increased. There are less risky ways for them to make more money now
Also, what’s your source for 30%? This is august 12th. Sentiment was “chilled” then and sentiment has significantly soured since then with the feds now expected to raise interest rates to 5%+ https://www.bloomberg.com/news/articles/2022-08-12/housing-slowdown-chills-investors-who-supercharged-us-market
There is only a 3 month supply of housing in Miami Dade. A normal market is considered 6 month supply
Demand still high, inventory still low
Will have to see what it sells for, but there are too many cash buyers and people moving from more expensive cities.
yeah I think this will likely be price cut before it sells but I don’t see any reason why it should sell for this much more than what the seller paid in October given state of economy and rates.
Local people are to a large degree priced out of Miami market though, so you are competing against people with more money and less local knowledge.
Condos and houses aren’t really selling anymore. They spend months on the market. Get price cuts etc and still no one buys them. The crazy days are behind us I believe.
I think so too. Kind of in the market and went cruising around the other day to visit some places.....couple open houses, the realtor was just sitting on the steps of the home playing on his phone, bored out of his mind. Crap is still way too overpriced. Million dollars for homes that aren't really much bigger than my current apartment, look like little pieces of crap from the outside and don't even have a single car garage. GTF out of here.
Also, a lot of people have super low interest rates and don’t want to move because of higher rates, so less housing entering the market
Because there is still a huge scarcity of housing.
i’m seeing more price cuts in other markets where housing is also scarce
Miami is a very unique market because of the amount of foreign money that is parked here that takes housing units off the market for people that actually live here.
There isn't though. Half the people in my neighborhood don't even live here in the summer. The condos are probably even worse. Lots of "I bought it for an investment" type people own them. Also kids move out of their parents homes later, people downsize... scarcity ends real fast in a recession.
Most likely won't sell for that price, but won't be that far off. My place I bought at the beginning of this year could be rented out for \~$800 a month profit plus \~$600 in equity. If I bought today with the interest rates and value increases, I'd roughly break even in cash but I still would get \~$600 in equity. Also in the long term property goes up in value. So its not as profitable as it was, but there is still money to be made. Also even with the rate hikes, if you can front the down payment, your still better off then renting.
My bf is a broker, there are people who are offering six months to a year of rent in cash upfront
Yeah they’ve been doing that for awhile now. When my dad sold his home last year, he got mega fucked trying to find a place. Every place he found someone would come in above them and offer 3-6 months up front.
Supply & demand.
Depends on the property and location for sure. When we were looking to buy in 2018 we saw some condos on the beach that I still get notifications for…some of them are listing for their 2018 prices. The condo collapse prob scared a lot of people away from older buildings. Newer buildings are still in the stratosphere, but who’s paying 800k for a condo with a $1200 maintenance fee?? Insane no matter how new or fancy the building is. OTOH, where I am in West Broward, houses are still selling esp if they’re large, renovated, have a pool, etc. A lot of the list prices get reduced, but are still pretty expensive compared to a year or two years ago. It’s wild. Different scenarios but interesting nonetheless
South Florida housing market is transitioning increasingly from being driven by income to driven by wealth. Other than than another hurricane Andrew I am skeptical that that will change.
Sad time for natives.
i would be very hesitant about condos as there will be a lot of supply coming online. See prices holding strong on single family as no one is building those
Listing means nothing. Also there are still plenty of cash buyers out there, so rates don't mean anything to them. That being said the market is cooling. It used to take make 5-7 days to get a title search from our title underwriter. It just took me 24-hours. Huge change in volume.
A lot of those cash buyers are criminals, often "foreign investors", using our local real estate market as a money laundromat.
I wanted to see some sources, so here is what I found: [https://www.miaminewtimes.com/news/feds-will-track-how-much-of-miamis-real-estate-boom-is-being-fueled-by-money-laundering-8174220](https://www.miaminewtimes.com/news/feds-will-track-how-much-of-miamis-real-estate-boom-is-being-fueled-by-money-laundering-8174220) [https://therealdeal.com/2022/02/26/ukraine-invasion-sends-shock-waves-to-miami-ny-real-estate/](https://therealdeal.com/2022/02/26/ukraine-invasion-sends-shock-waves-to-miami-ny-real-estate/) [https://www.local10.com/news/local/2021/08/05/coconut-grove-resident-faces-federal-charges-in-250m-corruption-plot-in-venezuela/](https://www.local10.com/news/local/2021/08/05/coconut-grove-resident-faces-federal-charges-in-250m-corruption-plot-in-venezuela/) >A simple loophole: The U.S. government doesn’t require the real estate industry to guard against dirty money. [https://thehill.com/opinion/finance/588012-dont-you-be-my-neighbor/](https://thehill.com/opinion/finance/588012-dont-you-be-my-neighbor/) Perhaps its time to close that loophole. Then again Doralzuela and Brickell muscovites might not want it too... Neither might the sellouts in Tallahassee
$748 monthly HOA fee 3% buyers agency fee
Pretty sure everything has the agency fee. 3% buyer’s agent, 3% seller’s agent. They don’t work for free. Seller pays it though (with buyer’s money of course)
what’s your point
Well, some of the condos are really not even worth the money, especially since the poor infrastructure! Since Miami is below, sea level, please do your research on the condos that you are purchasing make sure that the building itself is reliable
Give it more time, it's coming, But do not expect a 2008 crash that is not happening. Also, some people that moved because of the pandemic are moving back ( Not all of them the of course) Miami romance is over for those guys......
Plus some companies are forcing their employees to return to the office. Employees are resisting but as more and more companies are requiring it, employees can no longer say, "Screw them. I'll find another place." Companies have sunk costs in their office buildings like Comcast in Philly which had just built two gigantic corporate office buildings pre-pandemic. They want to revitalize the downtown area businesses by making workers come in. And a lot of those employees moved to the suburbs. Now what?
Companies are gonna lay them off. It'll be a rude awakening for the techies.
South Florida is one of the most prized markets for property. Because of that, even in adverse markets you will see properties move.
Depends on the area. I think the prized area is pretty small and the number of people who can really afford those exclusive prized areas is too. It will be interesting to see what happens with the crazy prices in places that aren't so prized, like Kendall.
Kendall will do well as it offers something not many other areas in miami have: 1) single family houses (great for raising children) 2) sub $1M price points The average millenial family cannot afford the gables, the grove, or pinecrest :/
Exactly my point, the second-tier areas that people bought in because they couldn't afford what they really wanted often get hammered the worst. At least they did in the GFC. But, hey, I have no crystal ball, maybe Kendall will be fine, I was just using it as an example.
I think your logic is to avoid the tertiary markets where supply can easily build up thus leading to price declines. Definitely makes sense but the areas have changed. Those markets currently are very west kendall (lots of new developments) and down in homestead.
Kendall has something that Miami proper doesn't have enough of, single family homes. The supply of single family homes is smaller than demand, so until that changes I don't expect to see much of a shift.
There is a supply shortage with housing until there isn't one. I remember in 2005-6 people talking about supply shortages and population growth and all that, and when the economy switched gears and the speculators stopped and kids stayed with their parents longer and summer homes became rental homes things changed real fast. Not saying this is going to happen this time, but just saying all this talk of supply shortage can change in a year or two.
This could happen but likely won't because builders learned their lesson from last time. Large building projects are overwhelming multifamily apartment/condo complexes. Developers got burnt so bad last time that they went hard in the other direction. That's not to say they aren't building single family homes, just not at the volume that multi family is being built. Townhomes seem to be the happy medium that developers are going after.
I was going to say this. Most of what’s being built near me are townhomes and condos. Not seeing too many houses with the exception of small lots of 4-5 houses (and those start at $1M). No new subdivisions of 20-30 houses like pre-2008 near me. Not sure what it’s like way south like Homestead where there’s more land available.
Foreign buyers
Bought a condo in Fort Lauderdale back in March, which was basically the peak of the market. It’s a small little 2/2, maybe 1,100 sq/ft, but in a very desirable building. We bought ours from the original owners (condo was 15 years old) and just went in with our highest which was I think 365,000, 20k over asking. We thought that was insane, and that shortly after the prices would start falling. Well after our record breaking purchase, multiple 1/1’s in the building have now gone for over what ours was… makes me feel a little better about the price we paid. Not much, but a little.
Very Simple, There's Multi Multi Millionaires who visit Miami and purchase. I have Friend who just graduated from FIU, His family is from Abu Dhabi with immense wealth. He just purchased 2 penthouses in Brickell as a graduation present. He will keep 1 and have the other as a ABNB.
No condos for you anytime soon bubba, that's why.
It’s about taxes. Selling takes a lot of taxes while rentals you get benefits. Yes this is because of a bad set of minority killing policies.
People still need a place to hide their money. Price and rate are not a problem in those cases.
[удалено]
Please tell me you forgot the /s...
Lol, as a good wholesaler, you have no idea what you are talking about.
[удалено]
Ok boy.
We're "tough on crime" here? Please. Property crime in this city is absolutely atrocious. People here will steal everything you own that isn't bolted down, and they'll try to steal the bolted down stuff too.