A recent housing market forecast for Miami, Florida predicted that home prices could level off over the months ahead, following a year of average growth. Here are the latest trends, predictions and forecasts for the real estate market in Miami, through the summer of 2018.
Miami, Florida Housing Market Forecast: A Dip in Home Values?
According to the real estate information website Zillow, the median home value in Miami rose to $300,500 as of July 2017. That was a slight increase over the previous year’s median. According to the company’s analysts, prices in Miami rose by 2.2% during the 12-month period from July 2016 to July 2017.
Looking forward, however, their economists’ forecasts call for a slight decline in Miami home values. In July, the company issued a prediction that prices would actually dip by -0.4% over the next year. This forecast was issued in July 2017, so it extends into the summer of 2018.
A Good Balance of Supply and Demand in Miami
The Miami real estate market appears to be fairly balanced right now, in terms of inventory. In many cities across the country, limited supply and strong demand are pushing prices north at a rapid pace. But that does not seem to be the case in Miami.
According to the national real estate brokerage Redfin, the city had a 5.2-month supply of homes available as of June 2017. To put that figure in context, real estate experts consider a “balanced” real estate market to have around six months of supply.
By way of contrast, the nation as a whole had an average 2.5 months worth of supply in June. So home buyers in Miami are actually better off than those in many other cities across the country, in the sense that they have more properties to choose from.
This could be why home prices have been forecast to level off over the next year or so. Or at least part of the reason. When housing supply is sufficient to satisfy demand, there tends to be less upward pressure on prices. So perhaps that is why the economists at Zillow have issued a flat to slightly negative housing market forecast for Miami, extending through summer of 2018.
Of course, real estate conditions vary from one city and neighborhood to the next. There are some areas of Miami where supply might be more limited. But looking at the metro area as a whole, there is a decent amount of supply available as of summer 2017.
Median Sale Price Doubled Over the Last Five Years
In June, Redfin reported that the median sales price for the Miami housing market was $285,000. That is a significant increase from five years ago, when the median was $140,000. It has more than doubled in the last five years alone.
This too could be contributing to the modest outlook and forecast for the Miami real estate market, stretching into 2018. Prices have risen steadily over the last few years, reducing affordability for home buyers. That kind of trend is only sustainable for so long, before the market will “correct” itself.
Mortgage Rates Predicted to Rise in 2017, 2018
While home prices in Miami have been predicted to level off over the next year or so, the recent forecast for mortgage rates suggest that they will creep upward over the coming months.
In its June finance forecast, the Mortgage Bankers Association predicted that the average rate for a 30-year fixed home loan would rise to 4.4% by the fourth quarter of 2017. According to Freddie Mac, 30-year mortgage loans had an average rate of 4.03% when this article was published in mid-July. So that would be a notable increase in borrowing costs – if this particular forecast turned out to be accurate.
So, even though housing market forecasts for Miami are calling for little to no house-price increase, home buying costs could still go up for those buyers who need to use a mortgage loan.
Disclaimer: This article includes forecasts, predictions and projections for the Miami, Florida real estate market through 2017 and into 2018. These forward-looking statements were issued by third parties not associated with our company. We have compiled them here as a service to our readers, and to help home buyers make well-informed decisions. As a rule, MetroDepth makes no claims or assertions about future housing or economic conditions.