The Miami housing market's pandemic boom is finally coming to a slowdown, as inventory rises and sales fall amid growing uncertainty over the impact of Donald Trump's tariffs on the U.S. economy and Americans' personal finances.
According to a recent Redfin report, 17.9 percent of pending home sales in Miami fell through in March, when spring homebuying season started to heat up, up from 16.1 percent a year earlier. The city had the 20th-highest share of cancellations in the country among the 50 most populous U.S. metropolitan areas.
Why It Matters
The Florida housing market is considered to be undergoing a "correction" after years of overheating. Demand for housing in Florida exploded during the pandemic, when an influx of out-of-state newcomers moved to the state chasing sunny weather, lower taxes, and a relatively more affordable cost of living.
But as much-needed new inventory is finally landing on the market thanks to the state's building efforts over the past couple of years, buyers are keeping to the sidelines, discouraged by stubbornly high mortgage rates and rising housing costs. As unsold inventory piles up in the state's market, prices are starting to fall in some of the most overvalued markets in Florida.
What To Know
The number of listings on the Miami market in March, at 7,653, was up 4.7 percent from a month earlier, "a bigger increase than normal for this time of the year," according to a recent report by Realtor.com. It was also, significantly, 47 percent higher than in March 2024.
Meanwhile, homes were also selling slower than at the same time last year, going under contract after an average of 66 days on the market, compared to 53 at the national level.
That is partially because buyers are still struggling to afford the purchase of a home. The 30-year fixed-mortgage rate is still hovering between 6.5 percent and 7 percent (as of April 17, it was 6.83 percent), and home prices are higher than they were before the pandemic. In Florida, rising homeowners association (HOA) fees and property insurance premiums are also squeezing many potential buyers out of the market, and discouraging migration to the state.
According to a recent report by Redfin, Miami experienced the fifth-biggest change in net domestic migration between 2023 and 2024, at -16,781.
"The collapse in demand in Miami's housing market is breathtaking," real estate analyst Nick Gerli, CEO of real estate analysis platform Reventure App, wrote on X.
"Sales are down 50 percent from pandemic peak, and are 30 percent below the long-term average for March. There's a narrative building in Florida that somehow Miami won't be impacted by this housing downturn," he added, talking about the Miami metro area. "And that narrative is likely wrong."
Gerli reported that there are up to 51,000 homes for sale in the Miami metro area, which includes Palm Beach, Broward, and Miami-Dade county, the second-highest level on record for March according to Realtor.com's inventory data set.
While prices are still holding up in Miami-Dade, which reported a 1.8 percent year-over-year increase in March, in Palm Beach and Broward they are falling, respectively by 2.5 percent and 1.1 percent year-over-year.
In Miami, the median sale price of a home was $650,000 in March, relatively unchanged from a month earlier.
"In some ways, it's surprising prices haven't dropped by more already due to the demand collapse. And resulting inventory spike," Gerli wrote. "But in the end housing downturns can take time to play out. And the whole Miami area is at a big risk if the current trends in the market continue."
What People Are Saying
Realtor.com senior economist Joel Berner said in a recent report: "The momentum that the Florida housing market picked up in the wake of the pandemic appears to be waning, with prices down and time on market up this spring."
Bryan Carnaggio, a Redfin Premier agent in Florida, said in a recent report: "People used to move to Florida partly because they could get a deal. Now, people can't afford to move here. The first questions from out-of-staters are, 'How bad are the hurricanes? How high are insurance rates?'"
What Happens Next
The Florida markets that are undergoing a "price correction" are among the ones that were the most overvalued during the pandemic. According to Gerli, prices in Miami-Dade County are 20.3 percent overvalued "compared to the long-run norms, indicating some major downside risk."
