Experts say overvalued market causing South Florida real estate prices to be so high

MIAMI ā€“ The housing and rental market has been hit extremely hard as inflation concerns rise across the nation.

Real estate economist Ken H. Johnson says South Florida homes are overvalued. ā€œWe are definitely in probably the worst housing affordability crisis that weā€™ve seen in Miami in the last 40 years,ā€ said Johnson. ā€œMiami metro, which is all the way up through Palm Beach County, is pricing out at roughly 30 percent above this long-term pricing trip. Rental markets in Miami are roughly 22 percent above their long-term premium. That makes that the most overpriced market in the country.ā€

Couple that with the price of just about everything going up. ā€œInflation, higher gas prices, higher food prices, higher materials, labor; all these are putting a crunch on the individual family budget,ā€ Johnson said.

Jonathan Alfonso runs Portal Real Estate and his own YouTube channel, doling out advice to his online viewers.

ā€œA lot of people are being pushed to the brink, right, and having those affordability issues. But the question for me as a real estate professional is, ā€˜How does that translate into the housing market?ā€™ā€ Alfonso said. ā€œThere still is such a massive demand for the very little inventory that we have that that inventory still is going to fetch premium.ā€

Added Johnson: ā€œWe have a population influx that is even greater than before, even greater than 12 years ago, and more importantly, we have a huge inventory shortage this time around.ā€

As more people from other states move here, theyā€™re competing with locals for the relatively few houses up for sale.

ā€œWe had that period of two years (since 2020) when interest rates were so low, and you also had so many people that were able to refinance. So now thereā€™s a bunch of people that are sitting with very low mortgage payments that are like, ā€˜Why am I gonna sell? Where am I going to go?ā€™ā€ said Alfonso.

Johnson said the high prices donā€™t seem to be coming down any time soon.

ā€œWhat looks more likely is that weā€™re going to go into a prolonged period of unaffordable housing, either to own or rent, in the Miami metro,ā€ he said. ā€œThereā€™s not an easy way out of this other than to build units and build them as quickly as we can.ā€

ADDITIONAL RESOURCES

https://business.fau.edu/departments/finance/real-estate-initiative/index.php

https://business.fau.edu/executive-education/housing-market-ranking/

https://business.fau.edu/executive-education/overvalued-rental-markets/

https://business.fau.edu/executive-education/bhj-buy-vs-rent-index/


About the Author
Liane Morejon headshot

Liane Morejon is an Emmy-winning reporter who joined the Local 10 News family in January 2010. Born and raised in Coral Gables, Liane has a unique perspective on covering news in her own backyard.

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