MIAMI – Six years ago, Tanjim Hossain and his wife, Christine Oliver, bought a single-story house on a corner lot dotted by palms in pedestrian-friendly North Miami. They had just sold their first house in Homestead and wanted to move to a more walkable neighborhood closer to their jobs. Since then, they welcomed their son and are ready to leave their two-bedroom, one-bathroom nest, eager to expand their brood.
But after a year of house hunting, they reevaluated their plans. They’re staying put for at least another year. Sell now, Hossain said, and they’ll be pressed to find another house larger – that wouldn’t be more expensive than what they want to pay – than their 1,349-square-foot residence in the same neighborhood.
“I’m cautious. There’s nothing in terms of macroeconomic factors that have made me feel this is the time to buy. Part of that is that we have a good home,” said Hossain, a 31-year-old mathematics and science teacher at Carol City Middle School in Miami Gardens. “Wanting a new home, is a want, not a need.”
Like Hossain and Oliver, new research shows more Miami-area homeowners are staying longer in their houses, townhouses and condominiums. In March, the real estate listing and research firm Point2 Homes published its first U.S. homeownership report looking at the median amount of time a buyer owns and stays in their residences. The company looked at a handful of urban markets in the nation, including the city of Miami and different neighborhoods in Broward County such as Fort Lauderdale. It calculated homeowner tenure based on data from sister company PropertyShark by subtracting the most recent sale date and the previous sale of properties.
Miami has a median homeownership tenure of seven years as of 2022, higher than the six-year tenure in 2012, according to Point2 Homes data. The homeownership tenure also increased by a year in the past decade in Fort Lauderdale, to six years in 2022 from five years in 2012. Still, homeownership tenure in South Florida falls below the national median of about 10 years for the same period, according to the latest data from the National Association of Realtors.
Anecdotally, the Miami Herald heard from people during the hot housing market of the past two years who stayed put rather than move, because they’d have bought at the upper end of the market. Also, others with years of home equity sold as the values of homes accelerated, took profits and relocated to cheaper places in Florida or outside the state and bought new houses. But this new report is the first time the Herald has data over 10 years for Miami-Dade and Broward counties regarding the median number of years residents are keeping their homes.
The shorter homeownership tenure doesn’t surprise Hossain, considering the growing local Millennial population of people born between 1981 and 1996. Millennials like him and his wife, he said, “want more. That’s part of the Miami mentality. Miami is like the modern day New York. Everyone is hungry to do better.”
Transient area
Real estate experts attribute South Florida’s home tenure to it being a transient real estate market, one driven by people pursuing opportunities, entering and exiting the region at a faster rate compared to elsewhere in the country.
“Usually, the lower the (tenure) number, the more mobile you are and the more economic opportunities exist,” said Ken H. Johnson, a finance professor specializing in real estate at Florida Atlantic University.
Before the pandemic began in March 2020, foreign buyers took the lead in influencing the sales and rental inventory in the region. Longtime residents and natives often got priced out of the residential market due to international interest and competition. The coronavirus changed the playing field, with foreign buyers limited by travel restrictions and, later, a strong dollar. The pandemic ushered in a new key player in the regional real estate scene – out-of-state buyers from across the country, primarily the Northeast.
Since 2021, executives have flocked to South Florida taking advantage of remote work. Many employees and digital nomads followed, choosing to abandon strict pandemic policies, high taxes and unpleasant winters in many places around the country for South Florida’s warm weather and zero state and local income taxes. Corporations followed, opening outposts in the urban cores of Miami, Fort Lauderdale and West Palm Beach. When travel restrictions were lifted last year, foreign buyers returned and helped ramp up the competition and prices for area homes.
The migration exacerbated South Florida’s housing crisis, pushing leaders like Miami-Dade County Mayor Daniella Levine Cava to declare last April a state of emergency over housing affordability. Residents feel the pressure from the housing crunch, regardless of their socioeconomic status. The result? Some homeowners who had bought prior to the pandemic or during decided to hunker down, deciding to avoid slim pickings, the stiff competition, and historically high sales prices that peaked at a median of $575,000 for houses in Miami-Dade in October 2022.
‘On paper, we’re rich’
Ultimately, the choice of when to sell a home is a personal one, a factor difficult to calculate in demographic research. Take Hossain and his wife.
“There’s a lot of moving pieces. If we want to have a second kid, ideally we would move now to a second home,” Hossain said. “It is a catch-22. We wouldn’t want a second kid if we don’t get a bigger home, and we wouldn’t need to get a bigger home if we weren’t going to have another kid.”
The couple wants to earn more to afford the cost and maintenance of a larger home in their North Miami neighborhood. As public school teacher in Miami Gardens, Hossain earns $75,000 a year. His wife contributes another $75,000 a year to the household income as an environmental manager for the Florida Department of Health. Their combined $150,000 a year is still not enough to comfortably buy their ideal three-bedroom, two-bathroom, 1,500-square-foot house in North Miami. There, the median sales price for a house hovers at $555,000. They’re saving to spend up to $800,000 on their next dream home.
Hossain and Oliver once considered selling their house and leaving Florida for opportunities in Seattle. Although Oliver sometimes mentions Seattle, Hossain said they reconsidered a cross-country move this year with greater, higher-paying job prospects to remain close to his parents. They live nearby and babysit their grandson during the weekdays. They’re happy to stay put for now and avoid house hunting, even in their own backyard where open houses still draw dozens of prospective buyers.
“On paper, we’re rich,” he said. “Hundreds of thousands in equity. It’s nice when you think about the long-term and wanting to retire in 30 years.”
But real estate experts say homeownership tenure can be seen as either a positive or negative, depending on the view one takes, said Fernando Ferreira, who teaches real estate at the University of Pennsylvania’s Wharton School of Business in Philadelphia.
Differing indicators
On one hand, Ferreira said, the comparatively shorter time owning one home can be a sign of positive economic mobility. Buyers build enough equity within seven years in South Florida to sell and land their next dream home, maybe one that’s more spacious for a growing family or in a trendier neighborhood. After all, the length of homeownership isn’t as important as when one buys in a real estate cycle. Buying now, for example, would mean buying close to the peak of pricing. Owners would have to wait several years for a return as opposed to those who bought in 2019 or 2020 that saw a return by 2022. In other real estate markets nationwide, they might have to wait longer to build enough of a return.
The positive outlooks works, if of course, the same seller remains in Miami, finding or keeping a job that sustains their new lifestyle and abode.
On the other hand, the short tenure might be telling a different story, one longtime natives know all too well – Miami remains a transient city. Foreign buyers and investors have flooded Miami for years to park their money in real estate in the form of second or third homes, said Mike Pappas, president and CEO of the brokerage firm The Keyes Company. When these same buyers are ready to jet to a different community, they sell.
Residents follow a similar trend, Pappas said. Residents have left South Florida to pursue higher paying jobs over the years or to move to a community with a lower cost of living, where salaries can stretch far enough for a more comfortable lifestyle, retirement or larger home.
“Miami may be a more transient town. We move more in Miami,” Pappas said. “You have a lot of people coming from a lot of different places. I was born here. But I’m probably the rare breed.”
The seven-year median homeownership tenure in Miami might raise some red flags to those familiar with the Great Recession and Florida’s real estate market beating at the heart of the home foreclosure crisis.
“You had the boom and bust and you had an extremely high rate of foreclosures. The number of foreclosures was unforgettable. Lots of families bought houses and by 2007 and 2008 they were out. Foreclosure rates went back to normal by 2016 and 2017,” Ferreira said. “Right now, we don’t have a foreclosure crisis. I see the average number of years as a good sign relative to the rest of the country.”
Homeowners to stay even longer
Miami’s homeownership tenure is expected to tick up by at least another year over the next few years. Several factors are at play, according to experts, including Miami’s booming technology and financial services job scene, rising interest rates, high residential sales prices and economic uncertainty.
The pace of corporate expansions might have slowed, but firms keep coming into the region, promising new job prospects and higher paying positions. A larger group of residents is expected to benefit from the economic movement and be enticed to stay local.
Those homeowners staying just have to look elsewhere in the Miami market to know they likely have a good deal. If they bought or refinanced a home during the pandemic, their low interest rates will be hard to come by in the future. The Fed increased interest rates again in late March. As of the second week of March, Freddie Mac has a 6.6% rate for a 30-year fixed mortgage, higher than the 4.16% a year ago. The increase in interest rates means buyers in the market today have less buying power and will pay more interest over time for essentially less space.
Another factor for homeowners to consider? Home prices continue to rise annually in South Florida, one of the few metropolitan areas to do so in the country. Miami-Dade reported a median sales price of $555,000 for single-family homes in February, up from $536,000 in February 2022. Broward experienced even bigger price boosts with the median for houses hitting $560,000 in February, advancing from $519,000 a year ago.
Condo prices made the same climb. In Miami-Dade, condo prices increased annually to $390,000, up from $380,000 last year. In Broward, condo prices jumped to $272,000, considerably higher from $240,000 in February 2022.
Many experts predict home prices will drop at some point this year or in early 2024, and that has many people like Hossain and Oliver patiently waiting on the sidelines.
Finally, sprinkle in economic uncertainty – thousands of job cuts in corporate America, lingering inflation and economic concerns – and that leaves homeowners counting their blessings as opposed to chasing after bigger homes, at least for now.
“People are holding off on making the next move,” said Johnson, the real estate professor at FAU. “People like avoiding risk. One way to avoid risk is to stay put.”
© 2023 Miami Herald. Distributed by Tribune Content Agency, LLC.
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