Real Estate in Miami, Florida

Perhaps no state in the union has been ripped and pulled in more different ways during the recent housing slump than Florida. You have parts of the state, like Palm Bay (near Daytona) and Sarasota which are showing double digit drops in home prices over the last calendar year, and you also have places like up-and-comer Ocala and state capital Tallahassee showing 5 percent or better improvements during the same time period. In the middle of all this is beautiful Miami.


According to CNN, Miami has experienced a modest growth in the median price of home sales over the last year, up 2 percent to $385,000. Is the worst over in Miami or is this city of palm trees and beaches just a little late on the nationwide trend?


It really depends on who you ask. A pair of recent polls tend to contradict the question of if Miami real estate is worth investing in. A recent study that appeared in Forbes Magazine in early May listed the most overpriced real estate cities in the country. Miami finished second. Using a price to earnings ratio, the editors figured that Miami was due for a bubble burst and that investors should avoid this area like the plague.


But not everyone is in agreement. A CNBC poll posted on their site on May 11th, listed the top 5, and bottom 5 cities for positive real estate appreciation, an obvious concern for those looking to invest their hard earned cash in hopes for a future profit. Miami ranked 4th in the nation behind Seattle, Portland, OR and Charlotte. Looking further into this study, it points to the condo surge in Miami over the past few years and how they have helped to keep the market steady while single family residents have been sinking. But in a market as promising and as profitable as Miami, how much longer can you really expect a slump to continue?

It is safe to say that as long as there are harsh northern winters, potholes and wind chills, there will always be a migration to South Florida. No area in the country has expanded so rapidly over such a short period of time as Florida has, and the recent housing slump can’t be seen as anything more than a temporary self-correction on the market.


This goes for the rest of the state, as well, even in areas like Sarasota and Palm Bay which have, historically, been retirement communities. There is simply not that much tropical beach in the United States, and while prices may fluctuate over time, to think that the long term trends in Miami and throughout Florida is headed anywhere but up is foolish.

The question remains, however, how much longer will the slump last? Home prices have been dropping across the state for the last three years, but as recent numbers have shown, Miami has stabilized and the chances of prices falling any further are unlikely. There is simply too much demand from those sick of living in dirty, old and crowded northern cities to keep the Miami housing market stagnant for long.
Things appear to be turning around as we speak, and the late and harsh winter of 2006-2007 is sure to drive many south looking for relief. Experts believe that much of the current Miami real estate market is overvalued, but when you have an almost limitless demand, how overvalued can it be?


Of course, not everyone can afford a penthouse on South Beach, but with the numerous suburban communities that dot the Florida coast, it is possible to find affordable housing especially if you are use to paying New York or Boston prices.


Warmly,
Mary Wozny