07 Jul The Housing Shortage Is a National Story—and a Miami Reality

The country needs a few more houses—well, actually not a few more; nearly four million more, according to Freddie Mac. And that number merely reflects the housing deficit at the end of 2020. A lot of inventory has been snapped up since then. A recent two-week period tells the story: According to HouseCanary’s Market Pulse report, listings in Florida dropped 26 percent between mid-March and early April. Homes are staying on the market for less time, at higher prices, and listings under contract from April 2020 to April 2021, year-over-year, rocketed up more than 91 percent. That is not a typo. Sam Khater, chief economist at Freddie Mac, has been quick to blame underbuilding throughout the last decade, but that doesn’t quite do enough to capture what’s happening across the country, much less in South Florida. We are in this situation due to the particular conditions of the pandemic, and, as in all things, there are conditions specific to South Florida. For example, it is widely acknowledged that Miami overbuilt, not underbuilt, in the last decade, flooding the market with new condo inventory that depressed demand and pricing in some areas. (Case in point: In 2017, The Related Group cancelled Miami’s Auberge Residences & Spa project amid a cooling market.) At the same time, affordable and workforce housing—a chronic South Florida problem—is among the nation’s most meager. Which brings us to pandemic-related factors. Lockdowns and density in Manhattan helped bring about the so-called exodus to South Florida, as every few days seems to herald another CEO, venture capitalist or flush techie dropping $10 million or $20 million or more on a waterfront estate in Miami or Palm Beach. The demand for less pricey digs has likewise been on fire. The narrative went like this: Local homeowners, now working remotely, craved single-family homes just like the Manhattan transplants. They wanted private outdoor spaces and home offices. Condo owners, staring at their locked-up gyms and cordoned-off swimming pools—the very amenities that drew them to luxury condo living—were freaking out. And sharing hallways and elevators was suddenly very 2019.