By Jennifer Wollmann, President of the Miami Association of REALTORS®
South Florida’s real estate market recovered from the pandemic and lockdowns faster than most of the country because real estate in Florida was deemed an essential service, and transactions were able to continue. Since other areas of the country were shut down, South Florida became a haven for people who were able to work remotely. Our warm weather allowed for outdoor activities while social distancing and our lack of a state income tax and friendly-business environment enticed individuals and companies to move here. In 2021, Miami International Airport became the busiest airport in the country with more international passengers than any other U.S. airport.
South Florida real estate sales were surging before the pandemic, but the pandemic accelerated the demand for local housing and made 2021 a historic year. Just a few of the records set by Miami real estate in 2021 include: Most annual total home sales in history and accomplished in only 10 months; most annual condo sales in history and accomplished in only nine months; most home sales in any month in history (June 2021); and most home sales in a quarter in history (2Q 2021). Miami’s all-time annual single-family home sales record is poised to be broken at the end of November 2021.
These historic sales numbers will have a long impact on our economy as many of the homebuyers who bought in South Florida made our area their primary home, which means they will be contributing to our economy year-round. Also, every home sale in the state has an estimated local economic impact of $77,291, according to the National Association of Realtors (NAR). For every two homes sold, one job is created.
Miami single-family home dollar volume rose from $2.8 billion to $4 billion by the end of the 3Q 2021 while Miami’s existing condo dollar volume increased to $3.4 billion. Since these numbers do not include Miami’s multi-billion-dollar new-construction condo market, the total impact of housing on our economy is higher.
South Florida remains the No. 1 destination for international homebuyers
South Florida continued to be the leader in international home sales, despite closed borders and restricted travel to the U.S from many countries. Foreign homebuyers purchased $5.1 billion of South Florida residential properties in 2021, according to the 2021 Profile of International Home Buyers of the MIAMI Association of Realtors (MIAMI).
More than half of all international home sales in Florida (52%) are in Miami-Fort Lauderdale-West Palm Beach, according to the Florida Realtors 2021 Profile of International Residential Real Estate Activity in Florida. Orlando finished No. 2 with 10%, and Tampa is No. 3 with 8%.
One in five of all U.S. international home sales happen in Florida and one in two in Florida are in the Miami metro market. South Florida is the top destination for all the top countries buying in Florida: Argentina, Brazil, Canada, Colombia and Venezuela, according to the Florida Realtors study. South Florida secures about 10% of all international home sales in the entire U.S.
South Florida commercial real estate stronger than national
With almost weekly news reports of companies either relocating or adding offices in South Florida and Miami ranking in the top metros with increasing employment, commercial real estate also performed extremely well.
According to a 2021 Commercial Report by the NAR, Miami’s commercial market is stronger than nationally. West Palm Beach-Boca Raton-Delray Beach ranked among the Top 10 Strongest Commercial Markets in 2021 Q2, and Miami ranked No. 5 in the U.S. for highest multifamily transaction volume in first half of 2021, according to Yardi Matrix. Investors traded more than $2.6 billion in multifamily assets in metro Miami in the first half of 2021, which is almost three times the volume during the same period in 2020.
2022 Predictions: More South Florida international home sales, inventory
Vaccinated foreigners were allowed to resume travel to the U.S. starting on Nov. 8, and that will lead to more international investment in South Florida — the No. 1 destination for foreign buyers.
Increasing prices on both residential and commercial real estate will continue into the first quarter of 2022 due to a lack of inventory and low interest rates. However, the increases will not be as high as they have been in 2021. More inventory will come on the market in the second quarter, especially in the condo market, which will result in a tapering off of price increases, especially in the high end.
More rental buildings will also come on the market, which should help alleviate some of the rental pressure we saw in 2021. Due to high demand and a lack of inventory, single-family housing and prices will remain strong.
South Florida has long been on one of the nation’s top places for population gains. Homebuyers and relocating companies will continue moving here because we are a global city with better real estate prices and lower taxes than other similar global city. Our warm weather, incredible international flair and acceptance of all cultures, world-famous beaches, top shopping venues and more set us apart. Now, Miami has established itself as a top tech and financial hub with companies like Microsoft opening regional headquarters here. It’s these high-paying jobs and new industries that will diversify and boost Miami’s economy even more.