MIAMI HOME PRICES TO INCREASE 20-30% IN FIVE YEARS

In this recent commentary titled “Miami Confidential” National Association of Realtors Chief Economist Dr. Lawrence Yun, who has been named among the top 5 economic forecasters by USA Today due to his accuracy, indicates those who buy real estate in Miami now are likely to see strong appreciation and high returns on purchase prices in just a few years despite the current oversupply of condos.

“In five years, do not be surprised if home prices in Miami are 20 to 30 percent higher than the current levels, “said Yun.

This means that in five years homes currently priced at $200,000 could sell for $250,000; a current million dollar home for $1.2 to $1.3 million. Since the current buyers’ market is conducive to price reductions as a result of negotiations, the return on investment could very well be even higher.

In Miami, the median sales price increased over 340 percent in just 10 years. During the current market adjustment, prices have dropped some, but the drop has been negligible.

“The median home price in Miami was $80,500 in 1985 and $105,800 in 1995 and $363,900 in 2005 at the peak of the market. Prices fell by 5.7 percent for single-family homes and 6.0 percent for condos over a one-year period to the 4th quarter of 2007 according to NAR date”, said Yun.
“Prices grew 0.3 percent for single-family homes over the same period according to the government agency OFHEO”, he added.

Yun believes the main reason sales activity has decreased so much in Miami is due to fear of a market crash resulting from homes prices having grown much faster than income.

About Stuart Drossner

Stuart Drossner has been in the Real Estate business for almost a decade, he quickly jumped into the South Florida Luxury market at the early age of 18 Years old. Stuart specializes in working with Banks throughout the country selling foreclosed properties. Stuart Drossner can be reached anytime on his cell phone for personal assistance at 305-502-1717.