The pandemic-induced influx of people to Florida has sparked a transformation in the state’s housing market. According to housing expert Jonathan Miller, the work-from-home trend has led to a surge in luxury apartment towers, particularly in South Florida. This surge, driven by wealthier newcomers primarily from the northeast, has permanently altered Miami’s housing landscape, making the luxury market more extensive than ever before. Unfortunately, this makes it increasingly challenging for pre-pandemic middle-class Miamians to find affordable housing.
In 2021, approximately 674,740 individuals reported a permanent address change to Florida, causing a housing market frenzy. Between January 2020 and last month, the median home price in Miami skyrocketed from $343,500 to $560,000, signifying a 63% increase since the onset of the pandemic. This surge in prices is making Florida less attractive to potential homebuyers, especially those seeking stable monthly housing expenses.
The Miami metro area is experiencing the brunt of this shift, as rising living costs and increased property values have led long-time residents to consider moving elsewhere. The city observed its first population decline in a decade between 2021 and 2022. Additionally, Floridians are spending roughly 10% to 15% more of their income on rent compared to just a decade ago.
Developers and newcomers from other states are the main beneficiaries of this transformation. For affluent newcomers from the northeast, Miami’s luxury housing is relatively affordable, especially in comparison to cities like Manhattan. The combination of warm weather, beautiful beaches, and a tax-friendly environment has turned Miami into a desirable destination for those freed from the constraints of expensive city offices.
This shift has left Miami’s middle-class residents, especially renters, facing a crisis. Rental prices have surged by 56.5% since 2019, outpacing nearly every other major metro area. Many long-time South Florida residents find themselves priced out of their own communities, a sentiment echoed by individuals like Mercedes Cabrera from Hialeah.
As a result of this restructuring, new construction in South Florida will predominantly cater to the luxury market. Housing for middle-class residents will see limited expansion. With existing housing stock running low, affordability is unlikely to see significant improvement. Miami and Southeast Florida, according to Miller, have now firmly established themselves as luxury markets, representing a permanent shift in price structure.
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