Miami Real Estate Learning Center

50% OF MIAMI PRECONSTRUCTIONS ARE FOR AIRBNB RENTALS

More than half of future Miami condos are being designed with Airbnb. The ISG report reveals that 31 pre-construction condo buildings in the Miami area, accounting for over 10,335 units, are planned with few or no rental restrictions. This allows them to be easily used for short-term rentals like Airbnb.

The trend is significant, as it means these short-term rental units will outnumber traditional rental units in the same region. This increase in short-term rental-friendly condos isn't what Miami needs, especially given the city’s ongoing housing crisis.

Miami has seen a surge in population, making it the fastest-growing state between 2021 and 2022, and this, coupled with soaring home prices, has exacerbated affordability issues. The median home price in Miami reached $600,000 in March 2024, nearly double what it was in 2020.

Despite this, more than 10,000 traditional rental units are still planned for Miami-Dade and Broward counties, though they will take years to complete. I think we need more traditional rentals to accommodate Miami’s growing population and not short-term rentals which by the way are going to exceed the demand. Plus, and this is my own opinion the condo hotel concept does not work since the hotel and the unit owner do not have the same goals in mind and guess who wins over?



IS IT HARDER FOR BOOMERS OR FOR MILLENIALS TO BUY A HOUSE?

The housing market today is significantly more challenging for millennials and Gen Z than it was for baby boomers in the 1980s. Although both generations faced affordability issues, the factors driving these challenges differ greatly. In the 1980s, the primary issue was high mortgage rates, which peaked above 18%. However, there was a greater supply of homes available, which eventually led to improved affordability as rates decreased.

In contrast, today’s market is strained by soaring home prices and a severe shortage of housing inventory, making it harder for first-time buyers despite lower mortgage rates than in the 1980s. Additionally, stricter lending standards and rising associated costs, like property taxes and insurance, compound the difficulties faced by modern buyers. These challenges are reflected in the fact that fewer millennials own homes compared to baby boomers at the same age, despite an increase in millennial homeownership during the pandemic.

Overall, while both generations faced significant obstacles in entering the housing market, the combination of high prices, low inventory, and strict lending standards makes it particularly tough for today's first-time buyers. So, what now? Well, I would recommend patience since time works wonders



ARE MY HOA FEES GOING TO INCREASE MORE?

Condo HOA fees in South Florida have surged nearly 60% over the past five years, driven by rising insurance costs, necessary repairs, and new state laws requiring stronger reserves for structural maintenance. In Miami-Dade, the median monthly fee reached $900 in mid-2024, up from $567 in 2019, while Broward's fees rose to $613 from $392 during the same period.

Several factors are fueling these increases. Insurance costs, particularly for hurricane coverage, have spiked as companies have either left the state or passed on higher costs to residents. The Surfside condo collapse in 2021 also led to tighter regulations, requiring condo associations to maintain reserves for structural repairs, adding further financial burdens on owners.

As a result, many condo owners are facing tough financial decisions, some are now considering selling their units. Have you ever thought that the cost of fixing a luxury building in South Beach is probably almost the same as fixing one in Aventura whereas the value is totally different? What I mean is getting a $100,000 assessment on a $2M condo is not the same as getting assessment when your condo is only worth $400,000.

This financial strain is expected to persist as more stringent reserve requirements come into effect in 2025, potentially leading to even higher fees and assessments. Lawmakers are monitoring the situation closely, but many condo owners fear they may be overwhelmed by the impending costs. If you are thinking about selling your condo let me know and I'll get you the best price.