As 2026 begins, a market in transition reveals where opportunity concentrates

Where We Stand

South Florida’s real estate market enters 2026 in a very different position from the pandemic era surge. Headlines point to price softening and slower sales, yet the reality on the ground is more layered and, for discerning buyers, more constructive.

The data tells a story of divergence. By the close of 2025, Florida’s median single family home price stood at $410,000, just 0.2 percent below the prior year and only 4.6 percent below the all time high recorded in April 2024. Condominium prices adjusted more meaningfully, with median values down 3.8 percent year on year. Within this broader picture, South Florida stands apart. The Miami Fort Lauderdale West Palm Beach metro is projected to be the only major Florida market to post price growth in 2026, reflecting the region’s structural advantages over several Gulf Coast counterparts.

Inventory levels provide further context. Florida’s housing supply reached 4.9 months at year end, still below the six month threshold associated with a balanced market. Homes spent an average of 53 days on market before entering contract. The Federal Reserve’s three quarter point rate cuts in 2025 brought mortgage rates down to roughly 6.3 percent, offering modest relief to buyers who spent much of 2024 navigating significantly higher borrowing costs.

For those of us who work across international markets, what stands out is not the correction itself but its selectivity. Markets driven primarily by domestic speculation experienced genuine weakness in 2025. Markets underpinned by global capital flows and structural demand proved more resilient, and that divergence is likely to widen in the year ahead.

What Has Shifted

Several structural changes have reshaped South Florida over the past two years, and understanding them is essential for anyone considering entry in 2026.

The first is the growing divergence between single family homes and condominiums. Statewide, condominium listing prices fell roughly 10.8 percent from their 2023 levels by the end of 2025, while single family homes declined only 3.6 percent. This gap reflects the specific pressures facing Florida’s condominium market. New structural inspection requirements introduced after the Surfside tragedy, rising HOA fees, and special assessments have altered the cost profile of apartment ownership. For buyers able to navigate these complexities and identify buildings with strong reserves and sound governance, the repricing has created genuine opportunity.

The second shift concerns buyer composition. International purchasers now account for roughly half of new construction condominium sales in South Florida, with Latin American buyers representing approximately 86 percent of that international segment. These purchases are rarely speculative. A significant majority are completed in cash. Miami continues to lead the nation in all cash transactions, with more than 43 percent of 2025 purchases made without mortgage financing. In the million dollar plus segment, that share exceeded 50 percent, rising to over 80 percent at the ultra prime level.

This capital is seeking preservation as much as growth. Currency instability across parts of Latin America, political uncertainty in several major economies, and the enduring appeal of dollar denominated assets in a stable jurisdiction have elevated Miami from a lifestyle destination to a core component of wealth preservation strategy. The prevalence of pre construction purchases, which allow buyers to deploy capital in phases over several years, reinforces this dynamic.

The third shift is the maturation of South Florida’s luxury segment. A new generation of developments is reshaping expectations of what the market can deliver. Projects such as Waldorf Astoria Residences Downtown Miami, St. Regis Residences Brickell, and Bentley Residences Sunny Isles introduce architectural pedigree, hotel calibrated services, and levels of privacy that increasingly position Miami alongside established global capitals. This is no longer a market defined primarily by seasonal second homes. It is becoming a destination for primary residences among globally mobile buyers.

What Lies Ahead

The outlook for 2026 suggests a market moving toward equilibrium, one that rewards buyers who act with clarity rather than urgency.

Mortgage rates are forecast to average around 6.3 percent nationally, with the typical monthly payment as a share of median income expected to fall below the 30 percent affordability threshold for the first time since 2022. Existing home inventory is projected to rise nearly 9 percent year on year, marking the third consecutive year of supply growth and bringing the market closer to historical norms. This expansion of choice, combined with modest rate relief, will benefit buyers who have spent several years navigating limited options.

Within Florida, regional divergence is likely to intensify. Several Gulf Coast markets face projected price declines of 8 to 10 percent in areas such as Cape Coral and North Port. South Florida, by contrast, is expected to see modest price appreciation, making it the only major metro in the state moving in a positive direction. This reflects fundamentally different demand profiles. Domestic migration patterns have cooled, while international capital flows remain structurally intact.

The rental market offers additional insight. Occupancy in Miami Dade remains elevated, ranging between 94 and 97 percent, with vacancy among the lowest in the Southeast. In peak season, Miami ranks as the tightest rental market in the United States, with vacant units leasing in barely a month. Florida continues to add more than 250,000 new residents annually, a demographic tailwind that institutional investors view as evidence of structural housing demand rather than speculative excess.

Caution remains warranted. Insurance costs continue to pressure ownership economics across the state. Trade policy uncertainty and the broader trajectory of the U.S. political economy introduce variables that could reshape capital flows, as the recent pullback among Canadian buyers driven by tariff concerns illustrates. Yet for buyers who understand these dynamics, South Florida offers something increasingly rare: a market where the correction has created value, where demand remains diversified across domestic and international sources, and where the fundamentals support long term positioning.

The opportunity in 2026 lies not in attempting to time a speculative cycle, but in recognising a market that has matured through its correction and emerged with clearer price discovery, stronger buyer profiles, and a structural role in global wealth preservation that shows little sign of diminishing.

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Richard Tayar is the founder of Columbus International, an international real estate firm bridging markets between the United States and Italy, with focus on New York, Milan, Tuscany, and Miami.