South Florida Housing Prices Grow Despite Slowing Rents

Published Date: April 30, 2024

A study by Florida Atlantic University and Florida International University indicates a worrying trend in the Miami metropolitan area’s housing market. Housing premiums have increased despite rising interest rates. The study found that a typical home in South Florida is 34.7% overvalued compared to its long-term pricing trend, up 15 points from the previous month.

 

FAU real estate economist Ken Johnson expressed concern over this trend, noting that while prices should be growing slowly due to slowing rents and rising interest rates, South Florida prices continue to rise. He suggested that the area might be in for a prolonged period of home price stagnation, making it slightly more favorable to rent and reinvest at this point.

 

Despite the concerns for South Florida, other metropolitan areas in Florida showed positive signs, with some areas experiencing declines in housing premiums compared to the previous month. Researchers noted that as prices slowly normalize, there is a debate about whether to rent and reinvest versus buy a home and build equity in terms of wealth creation.

 

Both researchers agree that the days of rapid property price appreciation in South Florida will end sooner rather than later.

 

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Original Article by Scott Sutton-WPTV

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