With interest rates on the rise and the national housing market predictions showing a cooling-off period, many buyers and sellers are wondering how experts are predicting the behaviors of local real estate markets. The various data forecasters use to guide consumers can be impacted by many variables in a single metropolitan area. If you are considering moving into Key Biscayne, Florida, or putting your existing property there on the market, you’ll want to know what these experts are predicting for the remainder of 2023. While no prediction is perfect, these trusted professionals use factual data to give you the best possible forecast.

After a banner year for home value increases in 2021, the market began to slow a bit throughout 2022. After record-breaking months of continuous growth, market watchers reported a drop in home prices year-over-year in February 2023.

The demand for homes remains quite high, and the supply is quite high as well. With these two factors considered, forecasters expect prices to drop slightly off their current mark before leveling off.

But what does the data show for this particular market? Like all local housing market forecasts, it’s essential to first look at the current data.

The small city of Key Biscayne saw a bump in its population between 2010 and 2020, according to the U.S. Census Bureau. The population in this community is highly educated, with nearly three-quarters of residents possessing a bachelor's degree or higher. The median household income is well above the national average, at nearly $168,000.

With an educated population and higher wage earners follows higher home prices. In 2020, the bureau reported that the median home value was $1.25 million. The data certainly shows that the real estate market in Key Biscayne is on solid footing. With higher wage earners moving into the area and purchasing luxury property, there are strong signals for putting your existing home on the market.

Moreover, Florida has no state capital gains tax, so when you profit from selling real estate in Key Biscayne, you will only owe federal capital gains taxes. That technicality makes for an active real estate market characterized by aggressive bids and sales. Investors at the top of the market (whose taxable income is over $441,400) only pay 20% federal tax on capital gains; depending on their modified adjusted gross income (MAGI), they can deduct up to $500,000. It all adds to one of the nation’s most lucrative real estate markets.

Seasoned investors in Miami real estate likely remember the industry buzz when, in July 2010, LeBron James announced his infamous “decision” to “take his talents to South Beach” and play for the Miami Heat on a six-year contract. At the time, LeBron was one of North America’s two or three most marketable athletes, sharing the limelight with Tom Brady (who eventually signed with the NFL’s Tampa Bay Buccaneers) and Tiger Woods (who owns a mansion and a golf course in the Sunshine State).

For Miami real estate owners, the timing of LeBron’s announcement couldn’t have been much better. The nation’s economy was no longer mired in the 2008 recession but hadn’t yet recovered. Global unemployment peaked less than a year before LeBron joined Dwyane Wade and Chris Bosh on the Miami Heat superteam. In a nutshell, LeBron’s migration attracted a wave of attention from other high-profile individuals, boosting demand for luxury properties across the city. In the months preceding the 2010-2011 NBA season, real estate agents saw certain luxury properties sell as much as 20% higher than expected.

About 13 years later, history is repeating — global icon Lionel Messi has signed a deal with Inter Miami, the MLS soccer team that plays its home games in Fort Lauderdale. The contract gives Messi an ownership stake in the team and will keep him in town through late December 2025. The icon’s arrival in Miami is analogous to LeBron’s, especially if one equates the recession with the pandemic.

It’s hard to overstate Messi’s stature. Long an international star, the winger rose to prominence through FC Barcelona’s youth academy. From 2004 to 2021, Messi led his squad to 34 trophies while collecting seven Ballon D’ors, the award for world’s best soccer player. Those seven MVP-equivalents are the most in the history of the sport that counts its worldwide supporters in the billions. To top it all off, Messi led Argentina to a World Cup championship in the summer of 2022 — if anything, his star has brightened with age, and now it’s coming to Miami.

With LeBron’s Miami move as precedent, area investors and property owners are keen on what might be called “The Messi Effect.” The economic ripple began with Inter Miami ticket prices, which rose 1,000% in the days following the Messi announcement. Inter Miami’s Instagram blew up by a factor of seven. Meanwhile, area agents are receiving interest from a more “European crowd” and buyers from South America. With the inventory of local real estate at a record low, an influx of wealthy international buyers could transform Miami into the hottest city nationwide.

As we mentioned earlier, the local real estate market forecast for Key Biscayne has a solid foundation for staying ahead of national trends. Even though prices may drop off some, they’ll likely stay level and well above their pre-2020 median values. This Miami suburb is a great place to relocate to, especially for those who only want a short commute into the city.

If you’re selling a home, Sandra Valenzuela will put her skills to work, getting you the best offers from hungry buyers. Sandra and her team have extensive and successful experience with luxury properties in Key Biscayne and Greater Miami. Reach Sandra anytime and get in while the market favors you.