By Rebecca San Juan
Forecasters say it’s a great time to buy or rent in South Florida thanks to the shifting market.
MIAMI – Homebuyers and renters are in luck. Real estate experts predict you can expect better deals in South Florida in 2024.
Thanks to a slowdown in home sales and a growing supply of residences – especially high-rises – it'll be a good time to rent or buy, the forecasters say. Prices will lower slightly, but it won't be a free for all. The market will be just slightly better than in 2023.
"There's that old saying of what goes up, must come down," said Jack McCabe, owner of the Deerfield Beach-based real estate and economic research firm Jack McCabe Expert Services.
“We're going to see that this year. A lot of what drove the market will taper off,” he said. “Yes, people might be coming from across the globe, but will they make up for the domestic, Northeast buyer? No, they won't. Are we going to see a tapering off of these unrealistic, artificial, inflated prices? Yes, we are.”
The Miami Herald spoke with seven real estate academics, analysts and real estate agents to hear what they predict will happen in 2024.
Here's what they expect:
What will happen with affordable and workforce housing?
Question: Any price relief for buyers or renters?
Ned Murray, associate director of the Jorge M. Perez Metropolitan Center at Florida International University: The only good news, if there's any good news, is prices won't go up that much more, including rents. They've maxed out, but prices are so unaffordable that it has paralyzed the market. Where do we go from here? We will pretty much see things stay the same as they are right now. We'll see difficulty in addressing that supply.
Ashon Nesbitt, CEO of the Florida Housing Coalition: There is still a great need, and the great need comes from those who earn 50% or below of the area median income. In a lot of cases these are working people who fall within that range. That's people who work full time and earn $40,000 or $50,000 and are raising a child. These are people who work in the medical field, schools and service industry.
Ken H. Johnson, a finance professor specializing in real estate at Florida Atlantic University: As we eventually oversupply at the higher end of the market, that will help drive down all prices across the spectrum. We get out and beat the drum of the bad builders, the bad developers, but they're building at margins that they have to make a profit or they have to close. You can't tell someone you have to build a product at below market cost for the good of the community. You let market forces work and then it solves itself over time.
Q: How will the short supply of affordable and workforce housing affect residents?
Johnson: In 2008 and 2009, people left Miami because there were no jobs. This time around the economy should remain robust. I don't think people will leave. I think you'll see an increase in density – more people living together, because they want to stay. We'll talk about affordability. We won't be happy with it, but people should remain in the market with good jobs.
Q: What solutions might we see play out?
Murray: We can be optimistic. Counties and municipalities do have it through their power, land use and zoning to make a difference. That's what we can be hoping for. Maybe a few years ago it was difficult to get local officials to understand just how bad the situation was, but there's a growing recognition of local issues. That begins to play out. The response to that is you don't have to rely on Washington. You don't have to rely on Tallahassee. You can handle this locally. ...We're not asking every municipality to build high-density, mixed-income housing. Even if it's one-to-two acres, that can make a big difference.
Nesbitt: It will be challenging to push for that development, because it has become so difficult and complicated to build in certain cases, because of rising costs and projects have to work financially. That will require a lot of creativity to think that through. That will be the biggest challenge, but I also think it will be a great opportunity to be able to galvanize all of those stakeholders to bring everyone to the table.
What should buyers shopping for a house or condo know?
Q: Miami-Dade has a median sales price of $615,000 for a house and $420,000 for a condo, according to the latest home sales report from the Miami Association of Realtors. What will happen to home prices?
Ana Bozovic, founder of Analytics Miami and Miami Dealsheet: We do have Fed rate cuts priced into the market. That should hopefully make it easier for people who need to move to move. We'll get lower-priced homes on our market.
Q: Supply remains low. Miami-Dade has 4.4 months of supply of houses and 6.8 months of condos. A balanced market ranges between six and nine months of supply. What will happen to inventory?
McCabe: We're going to see increases in inventory. We're going to see longer sales time. We're going to see people lowering the asking prices. ... For condos and townhomes, we've got a lot of new product coming on the market. As a result, we're going to see the prices of condos and townhomes coming down.
What will happen with luxury housing?
Q: What will define luxury housing – homes priced at or above a million – in the new year?
Danny Hertzberg, real estate agent at the brokerage firm Jills Zeder Group: The market will be driven by California and Brazilian buyers. I'm talking about hundreds of buyers actively looking from California. After every closing they say they have three friends they want to connect me with that are looking to buy.
Bozovic: The shift away from California and New York has just begun. We are going to keep getting tax refugees. It will be a major force in 2024.
Q: We saw a lot of well-known individuals moving to South Florida in 2023, including Amazon founder Jeff Bezos and soccer star Lionel Messi. How likely will that type of migration continue?
Jonathan Miller, president and CEO, Miller Samuel real estate consultancy firm: We're going to see more. Miami is not replacing New York as the center of the securities industry, but it is now on the radar. Work from home has changed the way people think about where they live versus where they work.
© 2023 Miami Herald. Distributed by Tribune Content Agency, LLC.
