How is the real estate market in South Florida performing? Well, the Miami-Dade, Broward, and Palm Beach counties are showing us some positive trends which support real estate investment in the South Florida real estate market. But for you to be confident in your investment, let’s get into how the market is looking so far, and then we’ll list 5 of the best cities to invest in for South Florida real estate investors.
South Florida Real Estate Market Trends
Here are some key factors that will help you to understand the general state of the South Florida housing market in 2019.
Home Sales Are Beating the National Average
Considering the slowdown the nation’s housing market is experiencing, investors will be impressed by the level of home sales in the South Florida real estate market. This has been an apparent trend throughout the year. For example, the US experienced a drop in home sales in May by 1.1 percent, whereas the three South Florida counties witnessed a rise in sales ranging from 3.9 percent to 6.6 percent. So clearly, even when there’s a national cooldown, people are still buying South Florida real estate.
Related: US Home Sales Fall Thanks to High Mortgage Rates
It’s important to note that even though home sales are currently higher than the national rate, they aren’t as high as they were last year. On average, 2018 had 7,573 real estate transactions closed. In 2019, that number is down 17 percent with an average number of 6,257 transactions. A factor which may have played into there being such a significant drop in year-over-year sales is the fact that the change in federal tax reform boosted transactions in 2018.
Varying House Price Trends
The average sales price for a South Florida real estate listing in the second quarter fell 7 percent, and the median sale price fell 17 percent. But this could be explained by the fact that the majority of recent sales have been condos and other lower-priced homes. Following along with the rest of the Florida real estate market, we’re still seeing trends of a seller’s market here as days on market dropped 32 percent.
Local market conditions play a big role in the varying price and sales trends we’re seeing throughout the South Florida real estate market. For example, because a majority of the sales in The South End were luxury homes, the average selling price for the second quarter actually increased by 9 percent. The average selling price of single-family homes in Town also increased by an impressive rate of 25 percent. Although Palm Beach condo sales increased by 34 percent, the average selling price actually decreased by 10 percent. So clearly, when it comes to determining the health of a market, there are a lot of factors that can skew the results.
Overall sales and price trends are looking up and the South Florida real estate market remains stable. But if you want to invest in South Florida real estate, you need to closely study the local markets you want to invest in and take a better look at their individual key return on investment metrics.
Related: Florida Real Estate Market Trends of 2019: What to Expect
Where to Invest: The Best Cities in South Florida
Buying a house in South Florida can prove to be a lucrative real estate investment- when you choose to invest in the right cities. Using Mashvisor’s tools and predictive analytics, our South Florida real estate forecast tells us which markets are best for investing in South Florida real estate rentals. Take a look at our data:
Miami Gardens- Miami-Dade County
- Median Property Price: $243,056
- Price per Square Foot: $166
- Average Days on Market: 133
- Monthly Traditional Rental Income: $1,725
- Traditional Cash on Cash Return: 3.2%
- Monthly Airbnb Rental Income: $2,678
- Airbnb Cash on Cash Return: 5.4%
- Airbnb Occupancy Rate: 55%
The average sales price is up 12.8 percent since last year in Miami Gardens to $265,000. The median price is at a good point for this market, so buyers will find a good inventory of investment properties priced below and above that point. We’re seeing strong returns for both rental strategies showing us that rental property investment is a good option for investors in the South Florida real estate market. If you’re going to rent your South Florida investment property on Airbnb, make sure to check the county regulations. Properties designated as Estate or Low-Density Residential can only operate as short term rentals if the property owner/responsible party is occupying the property for a minimum of 6 months a year. There are no requirements for residency for other land use categories.
Sunrise- Broward County
- Median Property Price: $231,376
- Price per Square Foot: $162
- Average Days on Market: 107
- Monthly Traditional Rental Income: $1,558
- Traditional Cash on Cash Return: 1.9%
- Monthly Airbnb Rental Income: $2,808
- Airbnb Cash on Cash Return: 6.7%
- Airbnb Occupancy Rate: 63%
Sunrise is a great location for a South Florida real estate investment because of its favorable rental trends. We’re seeing strong citywide returns for both rental strategies. It’s an overall healthy market experiencing positive trends. The median property price isn’t too far from the average selling price in Sunrise- $249,000 (32 percent higher than last year). While some cities in Broward County, like Fort Lauderdale, have directly addressed non-owner occupied short term rentals, there aren’t any countywide regulations. So we recommend getting professional legal advice regarding local regulations before investing in short term rentals.
Davie- Broward County
- Median Property Price: $382,468
- Price per Square Foot: $186
- Average Days on Market: 85
- Monthly Traditional Rental Income: $1,904
- Traditional Cash on Cash Return: 1.4%
- Monthly Airbnb Rental Income: $4,312
- Airbnb Cash on Cash Return: 5.3%
- Airbnb Occupancy Rate: 48%
Davie homes for sale offer a solid investment opportunity to investors in the South Florida real estate market. It’s a somewhat competitive market that isn’t really leaning towards either side (it’s neutral).
Related: Buying Rental Property in Florida Can Make for a Great Investment in 2019
Hialeah- Miami-Dade County
- Median Property Price: $303,139
- Price per Square Foot: $193
- Average Days on Market: 106
- Monthly Traditional Rental Income: $1,807
- Traditional Cash on Cash Return: 2.2%
- Monthly Airbnb Rental Income: $2,810
- Airbnb Cash on Cash Return: 4.0%
- Airbnb Occupancy Rate: 60%
Hialeah has more apartment complexes than it does single-family homes as there is a strong rental market in this city. In fact, 55 percent of the city’s residents are renters, not homeowners. So that information, in addition to our data, should make you confident investing in this South Florida real estate market.
Coral Springs- Broward County
- Median Property Price: $354,620
- Price per Square Foot: $168
- Average Days on Market: 101
- Monthly Traditional Rental Income: $2,000
- Traditional Cash on Cash Return: 1.5%
- Monthly Airbnb Rental Income: $3,053
- Airbnb Cash on Cash Return: 3.7%
- Airbnb Occupancy Rate: 52%
Coral Springs may have a higher median property price than the other cities we’ve listed, but once you start your search, you’ll definitely find houses for sale with prices below this point. Sustainable monthly cash flow thanks to the high rental income makes investing in this South Florida real estate market a smart move.
If you want to start investing in any of the cities mentioned above and want to find the perfect investment property which meets your preferences, all you need to do is sign up for a free account with Mashvisor. This will give you access to our Property Finder which you can use to find lucrative investment properties that match your criteria in a matter of minutes!
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.