An aerial view of single family homes and apartments in Key Biscayne, May 21, 2023. Analysts say the housing market is cooling, but not enough to make homes affordable (KBI Photo/Theo Miller)
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Housing prices are no longer going up at astronomical rates in Key Biscayne and the inventory of homes for sale is ticking upward.

The problem is that across South Florida, homes remain largely unaffordable. If you’re renting, you may need to consider a roommate. And home buyers are paying almost a 39 percent premium.

“Buyers would love to pay more for their homes, many of our buyers just don’t have the money that they had a year and a half ago,” said Ron Shuffield, president and CEO of Berkshire Hathaway HomeServices EWM Realty, said in his mid-year report presented last week to members of the Key Biscayne Chamber of Commerce. 

There are 146 single-family homes or condo units for sale on Key Biscayne. Nearby Brickell has 771 listings for sale.

Properties stayed on the island’s market for an average of 88 days with a median sale of $1.98 million, according to Shuffield’s report.

Back on the rental property side, Key Biscayne has 92 properties on the market, according to Zillow, a real estate marketplace company.

“You say they have stabilized, but they are still high,” said Tatayana Chiochetti, the Chamber’s executive director. 

Florida Atlantic University Professor Ken Johnson, who studies housing trends, said his team’s research found that it would take a household income of $113,000 in South Florida to foot the monthly rent.

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“That is a big number – that is a shocking number,” he said.

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Any would-be buyer in South Florida can tell you it’s tough out there.

The median sold price of single-family homes and condos within Miami-Dade County has Increased 257% over the past 12 years to  $510,000, according to Shuffield’s report.

Mortgage interest rates have increased as the Federal Reserve tries to get inflation under control. Rates have gone from 2.98% in November 2021 to 6.96% today. 

“The reason they (buyers) don’t have the money today is because they are relying on financing,” Shuffield said.

Not surprisingly, the under $1 million market in Miami-Dade is where inventory is decreasing, Shuffield’s data showed. Above that mark, inventory is increasing. 

So does that mean that home prices will eventually follow rents and stabilize?

Johnson said higher interest rates historically decrease demand and eventually lower prices. However, the demand remains strong because of the population influx into Florida.

“Which way home prices go will ultimately depend on which of these forces win out,” he said.

Seniors on fixed incomes or young people just entering the workforce are particularly hit hard in this rental environment.

“The way people have historically dealt with this is they double up, they triple up in those roommate situations. They extend past college,”  Johnson said. “The Golden Girls just weren’t just a sitcom.”

The Washington Post published an interactive map that shows since 2019, Miami-Dade rents have soared 26.3%. However, they have only gone up 1.3% in the last year.  That is well below the 5% annual increase that South Florida has seen historically, Johnson said. 

And there are more new apartments under construction presently than at any time in the last 50 years according to CoStar, which tracks real estate data.

The state legislature has earmarked $711 million for housing programs and tax incentives for developers to build affordable housing. Miami-Dade plans 18,000 units of affordable and workplace housing. But there are no known plans for any affordable housing in Key Biscayne, where local leaders have vowed to limit density. 

“It looks like for South Florida, the best thing to do is to build rapidly,” Johnson said.

John Pacenti

JOHN PACENTI is a correspondent of the Key Biscayne Independent. John has worked for The Associated Press, the Palm Beach Post, Daily Business Review, and WPTV-TV.

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JOHN PACENTI is a correspondent of the Key Biscayne Independent. John has worked for The Associated Press, the Palm Beach Post, Daily Business Review, and WPTV-TV.