Miami Real Estate Market Forecast for 2020

Miami has been in the headlines recently for its emergence as a tech hub, but how’s its real estate market looking?

Miami Housing Market 2020

The Miami metro area boasts a population of 2,757,700 and a gross product of over $140 billion. This is clearly an active city. But if you really want to understand how the Miami real estate market is going to perform in 2020, we need to break down a few trends. The most accurate housing market predictions for the Miami real estate market will come from analyzing current trends.

Using Mashvisor’s investment property calculator, we’ll first give you a quick summary of how rental properties perform in the Miami real estate market.

• Median Property Price: $532,647
• Price per Square Foot: $318
• Average Days on Market: 175
• Monthly Traditional Rental Income: $2,317
• Traditional Cash on Cash Return: 1.2%
• Monthly Airbnb Rental Income: $3,590
• Airbnb Cash on Cash Return: 3.5%
• Airbnb Occupancy Rate: 57%

A Few Miami Areas Stand Out

Based on a Miami Herald Real Estate Survey, we can say the following:

• Brickell is the hottest neighborhood in the Miami-Dade area for renters (Downtown Miami follows). Rental demand was so high in the downtown area of the Miami real estate market that there has been an addition of 6,300 new rental apartments there since 2014. By the end of 2019, there should be a total of 1,056 units added. Come 2022, this area in the Miami housing market is projected to gain another 4,062 rental units. The fact that future construction is in the books for this area projects that rental demand there will remain high.
• On the more affordable side of the spectrum comes Kendall- the hottest area for buyers. It’s a good family-oriented neighborhood that doesn’t break the bank for property owners in the Miami housing market. It’s surging in popularity among first-time buyers.
• The Miami housing market forecast includes North Miami as the fastest-growing city in the market, and it’s definitely a location Miami real estate investors should keep their eyes on. This area has very attractive price points and is located in close proximity to the beach and big shopping center. North Miami real estate has already increased in value by 7.4 percent. This under-valued neighborhood is getting more attractive with time.

Miami Home Value Growth Is Slowing Down

The Florida real estate market as a whole has witnessed growth in sales, prices, and transaction volume. But Miami has some of the highest home prices. According to Zillow, the median home value in the Miami real estate market is $336,300. But the Miami real estate market trends for 2020 project a cooldown. After years of growth, it seems quite clear the city is settling in a soft buyer’s market. Only 18 percent of respondents to the survey mentioned above predicted Miami real estate to continue appreciating in the next 12 months. 63 percent expect Miami real estate market values to remain flat.

Related: 3 Florida Housing Market Predictions for 2020

The Condo Market in Miami Is in High Demand

You’ll probably notice a lot of condo listings when searching through Miami houses for sale. The condo market in Miami is a big one. While this sector of the real estate market did experience a serious cooldown in 2014 and 2015 (mainly due to the US dollar strengthening), buyer demand in the condo market has been notably strong up to this point. This is for a number of reasons. Favorable tax laws, SALT tax state rules motivating a move to South Florida, and lower prices are just a couple. As condo prices become more attractive, buyer demand accelerates. There’s a large inventory to choose from. Investors are recommended to search for property now, as the Miami real estate market is expected to pick back up in 2020.

Related: 10 Questions to Ask When Buying a Condo to Rent Out

The Short Term Rental Market Is Profitable But Comes with Strict Regulations

Miami is a major business center and draws people in as it’s known for its culture, entertainment, the arts and international trade. Miami is a frequently visited city, whether it be for business or vacation. This makes it a prime market for short-term rental investment. Last year, about 954,000 people visited Miami-Dade County using Airbnb, which made it the app’s hottest location in Florida. But before you jump on the wagon and invest in Miami real estate with the intention of running a vacation rental property, you need to consider Miami Airbnb regulations. Is Airbnb legal in Miami? Yes, but there are a lot of rules. Airbnb Miami lands on the stricter side of regulation, but here’s a quick summary of the steps you need to take for legal operation:

• Obtain Florida state DBPR license (dwelling or condominium).
• Register with the Florida Department of Revenue.
• Obtain a Miami-Dade Certificate of Use.
• Check if your rental property is in a permissible transect zone in Miami.
• Get a Certificate of Use if in the City of Miami.
• Obtain a Business Tax Receipt from the City of Miami.

The biggest issue with Miami vacation rentals is zoning. For example, non-owner occupied short term rental properties located in Estate or Low-Density Residential zones are illegal. The property owners of Miami investment properties in these zoning districts need to reside in these properties for at least more than 6 months in a calendar year.

Related: Top 3 Cities in the US with Strict Airbnb Regulations

Best Miami Neighborhoods 2020

We have neighborhood-level data for better projections of rental property performance in the Miami real estate market. We’ll list the top-performing neighborhoods for traditional rentals. If you’d like access to our data on Airbnb rental property performance in the Miami real estate market, sign up for our services.

Search for your 2020 Miami real estate investment in these neighborhoods:

Liberty City

• Median Property Price: $247,241
• Price per Square Foot: $173
• Average Days on Market: 140
• Monthly Traditional Rental Income: $1,577
• Traditional Cash on Cash Return: 3.2%

North Bayfront

• Median Property Price: $418,463
• Price per Square Foot: $229
• Average Days on Market: 138
• Monthly Traditional Rental Income: $2,184
• Traditional Cash on Cash Return: 2.8%

Overtown

• Median Property Price: $394,500
• Price per Square Foot: $258
• Average Days on Market: 231
• Monthly Traditional Rental Income: $2,215
• Traditional Cash on Cash Return: 2.7%

Do you have a free Mashvisor account? Use our Property Finder to find lucrative investment properties in the Miami real estate market that match your criteria in a matter of minutes! I highly recommend you try out the search tool. There are many active listings of Miami investment properties with impressive return rates (above 15 percent) which will ensure you’re making money in 2020!