A Guide on How to Buy a House in Miami, the Magic City

Living in Miami is so much more than hanging out in South Beach. It’s about finding the sunshine, the activities, and the community that fits your lifestyle like a perfect pair of sunglasses.

As is true in nearly any metropolitan city in the United States, according to 2019 reports on BestPlaces, the cost of living is higher than average, but what you get out of the life you build here can be worth every penny. When you buy a house in Miami you will have sunny days, mild to warm winters, and a lot of opportunities to get outdoors and enjoy all that South Florida has to offer.

If you don’t understand the difference between buying a condo and a townhome in Miami, you might find yourself signing a lease on a rental and not finding that perfect place to call your own. We drew upon decades of experience in Miami home sales and scoured dozens of neighborhoods to find the hidden gems so that you can find the home of your dreams in this beautiful coastal city.

Finding a Miami home in your price range

To better understand where your starting point is, it is important to know what housing prices you can expect in Miami. The median household income of Miami-Dade County was $50,231 in 2019. According to SmartAsset, the median home sale price in Miami was $350,000 as of July 2019.

Homes in Miami are usually either single-family, townhomes, or condos. In Miami, a condo is most often an apartment-style home, often found in a high-rise building, whereas a townhome is usually found in a neighborhood-style community and feels very much like a single-family home where you have adjoining walls with neighbors.

You will find that the property type that you are looking for will directly relate to the home prices in your price range. The August 2019 report from Miami Association of Realtors stats say:

• Existing condo median price: $176,540
• Condo-townhome price: $190,000
• Single-family home price: $369,750

Real estate agent Luis Padilla, who’s had 439 transactions (including 255 condo transactions) in his career, explains that townhomes are a great bet for first-time homebuyers: “While you are usually sharing a wall, you will have a yard space and parking, and townhomes are in a little bit bigger demand because of their price point.”

FHA loans and condos in Miami

To really understand the Miami market as a buyer, it is important to know about how financing will play a role in any decisions you might have when it comes to purchasing a condo. If you plan on financing with an FHA loan, part of the process is finding an FHA-approved condo.

The issue you may run into is that many condo associations in the area do not have the reserve funding requirement written into their bylaws. The condo association must allot at least 10% of its budgeted income toward a reserve account in order for its condos to be FHA-approved.

Many Miami condo associations do not have a reserve account because it often means higher association dues for the owners. Padilla explains further: “99%of the condos do not carry the required reserve account. If they don’t have the reserve account, then it’s a 25% down payment.”

Buyers can get an FHA loan with as little as 3.5% down, so many buyers might look at townhomes or single-family homes to avoid scraping together a 25% down payment.

If you have FHA financing, and you don’t have a 25% down payment, talk to your agent; they’ll probably help you narrow down your search to specific areas in Miami.

Rent vs. mortgage payments

When setting down roots in Miami, is renting or buying a better option? According to Smart Asset, in 2019 the median price of renting a two-bedroom apartment is $1,355 in Miami, and the median mortgage payment is about $1,738. Overall, the city has a lower rate of homeownership, but your decision to purchase may not be factored solely by costs. It is also about what you want out of your homeownership experience.

If you only plan on staying for a year or two, the flexibility that renting offers is a great choice. Yet if you are looking for a place to call your own, to put down roots and build equity at the same time, then buying would be a smart option.

What to expect with an inspection

Robert Shoenfelt, a licensed home inspector, mold inspector, and thermographer, explains how he approaches every inspection: “A detailed analysis of the roofing system, electric system, heating, air conditioning and ventilation system, plumbing, interiors, and appliances. We determine if these systems are operating and assess where it is in its life cycle. If it is operating and at the end of its life, we make recommendations as to what you might expect in the future for repairs or replacement.”

With more than 15 years of experience, Shoenfelt says that for Miami buyers, “one of the biggest concerns for homes is water intrusion and mold. We are located in one of  the only subtropical areas of the United States, and moisture can be an issue.”

His company uses a thermal imaging camera to look for surface temperature anomalies, scanning both the exterior and interior of the home. “Any anomalies we find, we can then back that up with a moisture meter and make recommendations for repairs,” he says.

Shoenfelt can also provide wind mitigation inspections, a crucial service to consider when getting your home inspected as it gives you a clear understanding of your home’s construction and stability in the event of a hurricane. This inspection might be required by your home insurance policy, and if you have certain wind mitigation features on a home, it can reduce the costs of your insurance premium.

Getting the lay of the land

Some key aspects of living in the Miami area is understanding what neighborhoods might be a great buy as well as the sort of lifestyle you can carve out for yourself here.

Neighborhoods to watch

Padilla notes that “one neighborhood that is turning over is just west of South Beach area, located in the Design District and Biscayne Park area. It’s a good up-and-coming area for a young couple that wants to get that urban feeling, and yet be in a single-family home.”

Padilla also notes that in North Miami, off Highway 1 and 123rd Street, a new venture will include parks, water parks, and shopping centers.

The type of home you are looking for can also dictate where you will find something in your price range. According to Padilla, the inventory for 2019 entry-level homes (between $180,000 and $250,000) in Miami is smaller than inventory available for homes priced above $250,000. You can find homes with these entry-level price points south of Miami and closer to the Keys, but this will mean a longer commute and the possibility of finding yourself in a more economically challenged area.

If you want a short commute and close proximity to downtown, condos will be the most readily available homes; townhomes and single-family homes are most concentrated to the west and north of Miami. You can get a good sense of any particular neighborhood by checking its Area Vibes rating and Great Schools ratings to see how a particular area fits with your household’s lifestyle.

North Miami

Village feel with great boutiques and bodegas, this is an up-and-coming neighborhood.

Benefits: This neighborhood is a great place to buy as it has a great family feel, close to the beach, and close to the highways for easy access to other areas.

Drawbacks: Expect a commute into the city; jobs can be harder to find here, and you will likely need to work closer to downtown Miami.

Wynwood

Arts District located in the city core, expect trendy restaurants, food trucks, and local boutiques.

Benefits: This neighborhood is lively with art and culture; you will find loft-style apartments, and a vibrant lifestyle.

Drawbacks: This neighborhood is still hitting its stride; you will find affordable deals, but getting in on the ground floor means that this area is not as polished as other neighborhoods.

Brickell

Part of the downtown core and considered the Financial District of Miami, it has an influx of new restaurants and condos, spurred by the completion of Brickell City Centre.

Benefits: Close to downtown with a modern vibe, you can live and work here.

Drawbacks: With many condos in the area, you might see the reserve funding requirements come into play when it comes to financing your purchase.

Coconut Grove

Miami’s oldest neighborhoods, with a great waterfront, lush greenery, this neighborhood retains its bohemian roots.

Benefits: Boating culture is abundant here; you can find a wide range of home types, in particular, single-family homes. It is considered a great place to raise a family.

Drawbacks: Coconut Grove is a well-established neighborhood and can be pricey, especially near the waterfront.

Aventura

Located equidistant between Miami and Fort Lauderdale, this neighborhood is affordable and features high-rise condos and a high-end shopping mall.

Benefits: Affordable, and one of Miami’s largest suburbs, this planned community has excellent schools and is close to the beach.

Drawbacks: Expect to spend time in traffic, both in commuting to work and driving around the neighborhood.

House styles

The construction of homes in Miami vary greatly in style, and when you are searching for a home, it’s not just about affordability and location — it is also about how it looks.

Art Deco: This style is the epitome of South Beach and a great Miami postcard, with colorful pastel siding, applied decoration, and geometric styling.

Bungalows: Modest and charming, most Miami bungalows were built around the 1930s and are known for their resilience to withstand moisture, winds, and all forms of tropical weather. Their styles can range from a Spanish Mission look to craftsman.

Bahamian and Conch Houses: Built between 1890 and 1920, these styles of homes are more likely to be found in the Florida Keys, but you’ll still see them dotting Miami neighborhoods. Raised off the ground to provide cooling circulation, these homes can be brightly colored with weatherboarding for siding and gabled roofs.

Mediterranean Revival: With elements inspired by the Spanish and Italian Renaissances as well as Spanish Colonial styles, these homes often feature stucco siding and terracotta roofs.

Modern high-rise condos: Found all over Miami, these can range from affordable to luxurious in both amenities and materials.

When to buy in Miami

There is often a seasonal flow to the market, and if you understand what the high and low seasons in the Miami area are, you can use that to your advantage in purchasing your home.

South Florida is known as an oasis from the colder temperatures in the more Northern states, and this has a big impact on the high season for homebuying. The winter months in Miami are very busy for agents, which means that buyers have flooded the market and are competing for the best available homes. This also means that many great sellers might be timing their listings for the high season; if you have the flexibility to look for a home in both the summer and winter months, that flexibility could be to your advantage. To get more real-time numbers, you can check out Homelight’s local calculator.

Find a top buyer’s agent in Miami

As a buyer, your experience with the process of owning a home depends greatly on the success of the relationship you have with your agent and their expertise. Finding a top buyer’s agent in Miami means you will get the experience, skill, and understanding of the market that you will need to make the best-informed decision for the home you want. On average, buyers can save 9.2% (almost $47,000) with a top-rated agent compared to an average one.

The lifestyle of living in Miami is about more than what you spend on a home; it’s about what you build for yourself here, and a top agent really understands that. Begin your search in finding the right agent for you.

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