Stunningly Scarce Inventory Breaks Market Trends | Miami Shores October 2023 EDITION

Stunningly Scarce Inventory Breaks Market Trends | MIAMI SHORES EDITION

Miami Shores is not immune to the general Miami real estate market trend. Sellers are cautious about selling due to higher rates when purchasing their next home. Buyers are prudent in buying for the same reason.

I’ve knocked on hundreds of doors in the neighborhood in the past month speaking to residents about selling. The common reaction is “Where am I going to go?”. The concern isn’t a lack of awareness of where to move, but a fear if they sell they’ll be faced with higher mortgage payments which will bring their home affordability down.

It’s obvious in the real estate world that interest rates have hit their all-time high in the past 20 years, reaching 8% couple of weeks. Looking back to last October of 2022, rates were hovering around 7%, and a year before near 3.5%. You might be assuming home prices have decreased from the rate hike, as anyone would predict when looking at historical trends.

What if I told you the opposite has occurred? Home prices in Miami Shores have gone up 9.5% from October 2022 to October 2023.

***Read the Housing Report 2024: Miami Shores

How could this be possible? Simple. Inventory levels are at some of the lowest levels we’ve seen and are keeping prices steady. Last year this time there were 4.5 months of supply, whereas in October 2023, there were 3 months. Supply is getting chopped down, fewer homeowners are wanting to sell, and demand is still sparking.

Home values on average are at $1.293M in October 2023, up 12.9% when compared to October 2022.

New construction homes can’t catch up to meet demand. There are only 2 available new construction homes on the market right now with another 5-7 lots being developed as we speak. Who’s to say those will be for resale, most likely for the homeowner to live in themselves? They are available on average between $1,200 to $1,500 per sqft with lots averaging 10,000-15,000 sqft.

A couple of homes overlooking the bay have been sold these past few months, selling on an average of $1,700 per sqft for a teardown or project.

My Advice to Sellers

There must be a known need to move. I call it the 5 D’s: Death, Divorce, Diapers, Downsize, Debt. A changing life occasion will be the motivating factor to enter the market to sell and find a new home. That’s not to say if retirement is on the horizon, now is the best time to sell your home.

My Advice to Buyers

Don’t get caught up trying to time the market. I recognize home affordability is harder since rates are at an all-time high. Instead, be motivated to purchase according to your financial budget. Plan on what you can afford as a monthly payment and target home prices that will meet that criteria. Work with your real estate agent to create a plan around affordability. This will eliminate any strain on chasing rates. The good news, home prices may level off and start seeing reductions, helping you win a home on your terms. As to the future, when rates do come down, be prepared for home prices to shoot up again, causing another surge in values.