Having nailed our Miami real estate market forecast for 2023, it's that time of year when we have to talk about what our years of experience tell us is coming for the new year. In this blog, we'll give you an overview of what this year brought for the luxury real estate market and we'll delve into our top five Miami real estate market predictions for 2024. Finally, we'll cover some questions we get asked all the time by our clients and buyers so you can get ahead of what's coming.

At the beginning of 2023, when most analysts forecasted a housing crash with rising interest rates and rumors of an upcoming recession, we held our ground and correctly predicted that Miami would still be one of the top 3 hottest major real estate markets in the U.S. and that prices would go UP! 

Fast-forward to year-end and the housing market has performed better than expected, with the average sale price for condos located in coastal neighborhoods (including Miami Beach) rising 8.8% year-over-year, going from $901,376 in November 2022 to $984,464 in November 2023, according to MLS data. What's more, in the last five years, the growth has been an outstanding 56.5%, going from $550,409 in November 2018 to the aforementioned $984,464.

Here's a snapshot of our exclusive quarterly Miami luxury condo market price analysis, mapping the past 10 years.

Average Sales Price of Miami Condos (Coastal): 2013-2023

— Why 2024 Will Be a Great Year for Miami Luxury Real Estate

Having analyzed the changes in the real estate market for the previous period, we are very much looking forward to Miami real estate trends for 2024. The year 2023 has been a transformative year for Miami's luxury housing market in multiple ways. The city has managed to stand out in a slowing national housing market, with outstanding quarterly sales that outperformed pre-pandemic years and retained enough momentum to stabilize the super-charged post-pandemic market.

Unpacking the quarterly sales chart for luxury condos below shows how the market moved forward with sustainable growth, as sales from Q1 to Q3 2023 outperformed all pre-pandemic numbers. So, just when people thought that Miami real estate was going to fizzle out after the last two year's boom, our luxury housing market has maintained a stable stride that's well above pre-pandemic numbers.

Overall Miami Quarterly Luxury Condo Sales 2015 - 2023 - Fig. 1.2

Overall, Florida emerged as the second-most valuable housing market in the U.S. in 2023, leaving behind the likes of New York. According to Bloomberg's recent study, Florida's housing market value share stands at $3.846 billion compared to New York's $3.690 billion. 

For 2024, we expect this trend to continue as Miami welcomes more high-value companies that keep positioning it as a highly sought-after location for young professionals and wealthy executives in the country, thus setting the stage for continued stable growth with price gains in 2024.

— Our Top 5 Miami Real Estate Market Predictions for 2024

1. Steady Market Demand in 2024

Over the past few years, Miami has had a major image makeover. We're no longer just a vacation or second home destination, but a place to live and call home. Thus, Miami condo market trends have changed for good. In fact, 59% of Americans voted Miami a safe city to live and visit – ahead of the likes of New York, Chicago, Los Angeles, and San Francisco. This, paired with the perceived benefits of condo living as opposed to cumbersome single-family home maintenance, could be a major draw for domestic older buyers looking to downsize their empty nests.

Moreover, the fact that Florida has no personal income tax has always been a major attraction for high-income individuals. Recent research shows that Florida is the No. 1 state of choice for young, well-established professionals. And a study by SmartAsset shows that Florida gained a total of 2,175 migraters aged 26 to 35, earning at least $200,000 per year in adjusted gross income. This, paired with Ken Griffin's latest claim that Miami could replace New York as the world's financial center, gives us a vibrant economy that's poised for exponential growth.

And let's not forget our internationally sought-after quality of life, FIFA moving its headquarters to Miami ahead of the 2026 World Cup, and world-famous names such as Lionel Messi and Jeff Bezos picking our top neighborhoods for their homes.

All of this has turned the international spotlight on Miami real estate, which leads us to expect a steady market demand as the major Miami real estate market trend in 2024.

2. Prices to Stay Up in 2024

About a decade ago, a pre-construction waterfront condo would close for about $400 per square foot. However, today, most waterfront pre-construction condos will command nothing less than $1,000 per square foot, and can easily be priced at $2,000 per square foot. This shows how Miami has evolved into the desired home base for millionaires and even billionaires like Jeff Bezos (whom I sat next to at a restaurant in South Beach recently!). A 2023 study by Bloomberg shows that Miami rounded up the world's top five cities where ultra-high-net-worth people have homes.

And in the domestic market, wealthy out-of-staters have been buying homes at extraordinary prices in Miami, reshaping our luxury housing market. With more than 91,000 New Yorkers relocating to Florida between 2021 and 2022, followed by about 50,000 Californians, it's easy to see how our once affordable luxury housing market has become a top attraction for domestic buyers looking to escape high-income tax states.

Finally, foreign buyers, particularly from Latin America, were not far behind. This year, LATAM buyers bought about $5.1 billion worth of South Florida residential property. Of this, Miami-Dade received 72% of the volume, with the top three international buyer pools originating from Colombia, Argentina, and Brazil, respectively making up 15%, 14%, and 7% of our international buyer share.

So, what's our forecast for Miami real estate market prices in 2024? We expect luxury housing prices to grow next year, with high-end brands such as Dolce & Gabbana, Bentley, and Cipriani adding value and appeal to Miami's latest slew of new construction condos.

We further expect to see a bigger rift in pricing between older and newer condos, as the older product that has not been able to keep up with maintenance is likely to experience downward pressure with hefty assessment bills and bullish developers coming into play. We anticipate some of these older condos to go on the market for sale to developers who will take charge with a bulk buyout to knock them down and build ultra-luxury newer condos in their place, as it happened with condo units at Biscayne 21, which will turn into Edition Residences Edgewater.

3. Rental Market to Cool Off in 2024

Through 2023, Miami held onto its title as the hottest or most competitive market for apartments in the country owing to a 96.9% occupancy rate. However, according to recent rental price trends, the average rent for a 1-bedroom apartment in Miami dropped by 2% year-over-year to $2,650 in December 2023. Therefore, the Miami condo market is cooling off when it comes to rental pricing.

One of the reasons there may be price pressure on the rental market is because of all the multifamily apartments that are being built in Miami. And even though they offer attractive incentives that could take away demand from condos, true luxury, and waterfront buildings will still have a competitive edge over multifamily apartment buildings because the latter don't usually have that prime waterfront location or the amenities to match.

As we enter 2024, statistics will show what we're seeing on the ground, probably in the first or second quarter of the year. Prices will continue to stabilize after the market overshot a bit in 2022-23. Certain buildings could have downward pressure, especially those that rank high on investors' radars. 

However, we believe that the premium rental market, inclusive of waterfront, water view, or very luxury apartments, as well as short-term rental options, will experience some price appreciation in 2024 even as inventory may open a bit.

4. Mortgage Rates will Drop in 2024

With the 30-year mortgage rates known to follow the 10-year treasury pattern, we expect interest rates to decline over 2024 as the U.S. treasury yields come down. With long-term interest rates predicted to fall over the next five years, starting early 2024, we expect more buyers and sellers to get off the sidelines and dive right into the market.

However, the downside to more buyers and sellers entering the market would result in prices going up faster than in 2023. Still, based on our Miami real estate market analysis, we expect this dynamic to play out in the second half of 2024, rather than immediately.

5. Inventory will Increase in 2024

Several factors will contribute to this trend. Among them:

1. As interest rates go down over the next year, people who had been on the fence about selling their properties because they would lose their lower mortgage rates from previous years might decide to make the move. Mortgage rate have already fallen to their lowest level since May.
2. On the other side, we expect investors to put their properties up for sale to lock in their gains after the rapid double-digit growth we saw in the post-pandemic years. Next year we'll continue to see growth but it'll likely be a steady, single-digit one.
3. As Florida transitions to new condo maintenance laws, some investors looking for higher cash flow might consider selling because of the rise in condo fees and insurance. And as we saw above, rents might not necessarily go up at the same pace to outweigh the costs.
4. Finally, there will be hundreds of brand-new condos entering the market in 2024 for homebuyers or investors to choose from. Projects like Aston Martin Residences, Una Residences, Lofty Brickell, two Mr. C Residences towers in Coconut Grove, the 560-unit Legacy Hotel & Residences, and the 600-unit Natiivo, are some of the names being delivered next year that are almost or completely sold out. We are constantly updating the list of new construction Miami condos to be finished in 2024. However, there is always a higher-than-average resale rate in newly delivered buildings in the first year, so if you're interested, contact us for available opportunities.

Despite all of this inventory, we still anticipate next year's market to be balanced because more and more people will continue to move to Miami, thus absorbing the newly available units in top areas such as Brickell or Edgewater. Also, something interesting to note about new condo buildings is that, typically, they take about a year/year and a half to stabilize in terms of occupancy and price. So, it is normal for newer properties to list for a bit less than expected in the first year, but then bounce back somewhere in the second year.

— Summing Up Our Miami Real Estate Market Predictions for 2024

We are excited about the year to come as we expect a steady market demand to drive price appreciation. On the rental side, we can see prices in the Miami condo market cooling off in the coming months. And with mortgage rates dropping and inventory levels ticking up during 2024, Miami should further position itself as one of the hottest housing markets in the country. We predict that it will continue outperforming on every metric and seal its position as a global city of choice appealing to a wide array of investors and home buyers.

— Frequently Asked Questions (FAQs)

What is the Outlook for Miami Real Estate in 2024?

Overall, the outlook is positive for Miami real estate in 2024. With all market indicators pointing towards sustainable growth and stable prices with a slight appreciation, we expect the luxury housing market to be stable and perform well in the next year.

Is Miami Real Estate Cooling Off?

With steady demand and prices poised to increase slightly, Miami's luxury housing market is showing no signs of any strong cool-off in 2024. We expect the luxury condo market to continue as a balanced market, offering buyers and sellers equal value and opportunity in a global city poised for growth.

Is Miami Real Estate Overpriced?

Considering prices have continued to rise for luxury condos, even as the frenzied post-pandemic market is behind us, it would be incorrect to conclude that Miami real estate is overpriced. The entry of dozens of ultra-luxury branded new construction condo projects that have sold out means that a new echelon of buyers and end-users has arrived in Miami. And even though prices are unlikely to return to their pre-pandemic levels, we should consider these price gains as Miami having passed a major growth threshold in its real estate offering.