We’ve heard a lot of talk about a housing market correction in 2022. From most reports, the national market is in a correction. Many also predict it will carry over into the new year. Will Miami experience a market correction? Is it already in one? Let’s look at recent market data to see if we can find some answers.
Will Miami Experience a Market Correction in 2023?
Homes Sold
The number of home sales can indicate where the market is and where it is heading. If the number of sales consistently drops, it could indicate a correction. If you look at the numbers for November 2022, there were 678 home sales in Miami. That is a decrease of close to 50% from the same time last year. If you look at nearby markets like Miami Beach and Coral Gables, they have also seen a significant decrease in sales.
High Interest Rates
It is no secret that mortgage interest rates went up in 2022. When rates increase quickly, it is often a signal of an oncoming housing market correction. As rates go up, it increases the cost for buyers. That can have the effect of reducing demand. A 30-year fixed-rate mortgage was at about 3.5% in January of 2022. At the time of writing, the national average is just over 6.5%. That is down from the peak of over 7% a few weeks ago. However, many economists expect rates to stay high in 2023.
Days on the Market
Homes sell quickly in a hot market. As homes spend more time on the market, it can be another indication of a correction. Homes for sale in Miami stayed on the market for a median of 62 days during November of 2022. That is an increase of five days from November 2021. If you look at Miami Beach, days on the market dropped by over 25% from November of last year. Coral Gables also saw a decrease in the number of days homes stayed on the market.
Sale Prices
Economists often use sale prices as one of the most significant signals of a market correction. In Miami, you are looking at sale prices that went up by over 16% in 2022. However, that is about a 1% drop from the peak earlier in the year. Miami Beach sale prices in November are about where they were at the same time last year. However, they are down from a high earlier in 2022. If you look at Coral Gables, the average sale price is down by about 20% from the same time last year.
The question of a Miami market correction is tricky. Home prices have decreased since their peak, but only a slight drop. If the Miami housing market does experience a correction in 2023, it will probably fare better than many other markets.
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