Miami Investment Property Market
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Miami Investment Property Market Overview

Miami is the largest metro area in Florida and the 8th largest metro area in the United States. The Miami metro area spans three counties with an estimated population of 6 million people. The market has experienced significant recovery since the recession with home values increasing nearly 80% since 20121 and over 10%2 in the last year. Despite having increased home values still remain over 20% below the prior peak. Miami is expected to perform well relative to other top US rental markets with projected rent growth of 9% and home value growth of 10% through 20192.

High Home Price Appreciation, Strong Yields and Foreign Investment

In addition to strong home price appreciation (HPA) forecasts for the Miami market, rent growth is expected to keep pace as well. We estimate that rents will increase in the high single-digits over the next four years, which should support high yields and ongoing rent increases.

Another factor that makes Miami a great Single-Family Rental (SFR) market, is that it is among the top 10 U.S. markets for the strongest gross rental yield. Gross yields in Miami averaged 11.2%, which is well above the national average of 9.2%3.

One unique factor about the Miami market is that it garners significant interest from foreign investors. In 2015, $6.1 billion of Miami-area real estate, which is 36% of the market, was invested by foreigners. In comparison, foreign investors comprise less than 10% of the U.S. real estate market4.

When it comes to underlying fundamentals that drive SFR investment returns (job growth, household growth, income growth, and housing supply), Miami continues to show strength on all fronts.
  • HPA and rent growth: Some of the strongest home price and rent growth forecasts in the nation
  • Gross yields: Among the highest in the U.S.
  • Significant foreign interest supports home values
  • Decreasing foreclosures: Home foreclosures in Miami decreased by 40% over the last 12 months5, which supports home values in local neighborhoods
  • High negative equity rate: 27.2% of homes in the Miami market have negative equity, which is higher than the average US home6, however this number has fallen dramatically in recent years
  • Over 10 million tourists a year generate more than 60% of the Miami area's economic activity. To serve the visitors, nearly 10% of Miami's workforce is employed by hotels and motels, restaurants, and recreational facilities.
  • The art deco nightclub district in South Beach is regarded as one of the best in the world.
  • Miami has numerous attractions devoted to nature. The Everglades National Park offers a unique opportunity to observe the flora and fauna of an unspoiled wilderness, as does the Grossman Hammock State Park, near Homestead.
  • 1 Zillow
  • 2 John Burns Real Estate Consulting, March 2016
  • 3 John Burns Real Estate Consulting, March 2016
  • 4 Associated Press
  • 5 Findthehome.com, January 2016
  • 6 Findthehome.com, January 2016

Real Estate Investment Insights

Investment Style: High Appreciation
While each property will differ, this market is more likely to have properties where the value of the property is likely to increase over time.
Inventory:
Home Value *
$254,200
$200,700
National Avg
Home Value Growth (YoY)
6.6%
6.8%
National Avg
Rent **
$1,850
$1,427
National Avg
Source: Financial data from Zillow includes single family, condo & cooperative homes, updated on 07/31/2017
Job Growth (YoY)
2.4%
1.5%
National Avg
Household Growth (YoY)
1.2%
1.0%
National Avg
Estimated Months of Resale Supply
6.0%
4.3%
National Avg
Household Income
$46,200
$59,303
National Avg
Supply, Demand & Affordability data includes single family homes only, updated on 08/16/2017
  • Arrows indicate the directional change since the last update. No arrow indicates that there was no change in the data or no previous data is available.
  • * Home Value: includes all types of housing, including primary resident, condos, investment properties, etc.
  • ** Rent: includes all rental properties, including Single-Family Homes, multi family units, etc.