Miami’s Luxury Market Gains Momentum as Rates Stabilize and Global Buyers Return

Written by:

Steve Marcinuk

Date:

05 Jun 2025

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After weathering one of the most challenging periods in recent memory, Miami’s exclusive Key Biscayne real estate market has roared back to life in 2025, driven by stabilizing mortgage rates, renewed international investment, and pent-up demand from buyers who had been waiting on the sidelines.

“People are tired of waiting out the mortgage rates. It looks like this year it’s going to stay around the 6% mark, which is still a whole percentage better than where we were a year ago,” says Ximena Ulloa, a realtor with the Giulietta Ulloa Group, who has witnessed a dramatic market transformation over the past six months.

The turnaround has been nothing short of remarkable. After describing 2024 as “the slowest year since I started working in real estate,” Ulloa’s team closed over $40 million worth of deals in the first quarter of 2025 alone, with five to six properties currently under contract for the second quarter.

Local Expertise Makes the Difference

Ulloa’s success in Key Biscayne stems from an advantage that can’t be replicated: she grew up on the island. Having lived in seven different houses and three different buildings there, she offers clients authentic local expertise that proves invaluable in navigating this unique market.

“I know every street. I’ve been to every building,” Ulloa explains. “It’s very easy to work and to sell in an area where you believe in it, and you’ve grown up in it, and you see the magic of it.”

Key Biscayne’s appeal lies in its rare combination of pristine beaches, national parks, and relaxed island lifestyle, while maintaining easy access to Miami’s urban amenities, a proposition that continues to attract both domestic and international buyers seeking an “island paradise” lifestyle.

Post-Election Momentum Drives Recovery

The 2024 market presented significant challenges across South Florida, with Ulloa attributing the slowdown to “high mortgage rates, the lack of supply, and the fact that it was an election year, and people really didn’t know how things would sway.”

However, market dynamics shifted dramatically following the November 2024 election. “After November, a lot of things started moving for us,” Ulloa notes. This momentum has carried into 2025, with the team currently managing approximately 20 transactions for the second quarter.

The Key Biscayne market’s recovery stands in contrast to other Miami neighborhoods. “I know some other realtors, not on the island but outside of Key Biscayne, have been saying different things,” Ulloa observes. “They’ll text me saying, ‘It’s been a little slow, huh?’ And I’m not seeing that. I’m seeing a lot of activity.”

Wealthy Buyers Choose Strategic Financing

Despite Key Biscayne’s reputation as a destination for cash-heavy international buyers, an unexpected trend has emerged: many affluent purchasers are choosing to finance their acquisitions despite having the means to pay cash.

“We’ve done several big deals this year, including waterfront properties and units in high-end buildings,” Ulloa explains. “Interestingly, many buyers who could easily purchase with cash are choosing to finance instead.”

This strategic approach includes wealthy South American families purchasing multi-million dollar properties, suggesting that even the most affluent buyers are leveraging debt in today’s market environment.

Explosive Growth in Luxury Rentals

Perhaps even more surprising is the explosive growth in Key Biscayne’s luxury rental market. Ulloa shares a recent example that illustrates the intense demand: “We recently listed a rental at what we thought was a good price, and that same day, we got three different offers from all three people that we showed. We ended up renting it $10,000 above asking, about 25% above the listed price.”

The rental market has reached unprecedented levels, with the team currently marketing a property for $100,000 per month. “I don’t even know who has $100K per month,” Ulloa laughs, “but we do get calls to see it.”

The Pricing Reality Check

Despite the market rebound, a persistent challenge remains: the disconnect between seller price expectations and market reality. “I see a big gap between the prices that sellers continue to list at and what they continue to look for,” Ulloa explains. “I think they believe it’s still another market, and it’s not.”

Her approach with clients is refreshingly direct: “I tell them, ‘Look, I know that you probably want to hear another number, and I know that you probably want to sell this at a higher price, but if we’re being realistic, this is the price that it’s going to sell at.'”

The strategy proves effective, as properly priced properties often generate multiple offers and sometimes sell above asking, while overpriced listings languish and eventually require reductions. “80% of the exposure on a listing comes in the first two weeks,” Ulloa emphasizes. “If you come out high, you burn through that exposure.”

International Investment Remains Strong

Contrary to reports suggesting international investors are turning away from U.S. real estate, Ulloa continues to see robust international demand, particularly from South America. “Key Biscayne, though we are in the United States, is a very international island,” she explains. “We have many Europeans, South Americans more so than anything. We also get many Canadians.”

South American buyers continue to view Miami real estate as a safe haven for capital, driven by political and economic uncertainties in their home countries. “The reason they bring their capital out of their countries and put it into the United States is because it’s a safe investment,” Ulloa notes. “Many South American countries in recent years have switched to leftist governments, and there’s always the fear that they’ll end up taking their companies, their property, whatever it is.”

Current activity is particularly strong from Chile, Colombia, and Brazil, with many families diversifying their portfolios across both European and Miami markets rather than choosing one over the other.

Breaking Free from Low-Rate “Golden Handcuffs”

The phenomenon of homeowners reluctant to sell due to favorable mortgage rates—the “golden handcuffs” effect—continues to impact market supply, though Ulloa sees signs of this constraint loosening.

She cites the example of a family who had purchased a townhouse with a low mortgage rate but found themselves needing more space for their growing family. Despite their reluctance to give up favorable financing, practical needs eventually outweighed financial considerations.

“We’re seeing more people starting to let go of those homes for various reasons, which is opening up more supply,” Ulloa observes. “This is positive because it’s facilitating more market movement.”

Addressing Climate and Insurance Concerns

Hurricane risks and rising insurance costs remain significant considerations for buyers, particularly those financing their purchases. “People are definitely concerned about insurance,” Ulloa acknowledges. “Whenever they buy a property, especially if they’re financing, it’s a major consideration.”

However, she sees improvement in the insurance market as more insurers enter the state, helping to stabilize rates. Regarding climate change concerns, Ulloa takes a pragmatic view, pointing to the massive investment flowing into South Florida as evidence of stakeholder commitment to protecting the region.

Various mitigation efforts are underway, including elevated construction requirements, improved drainage systems, and potential barrier island projects. “All new construction and remodels now require homes to be elevated. In Key Biscayne, some streets are more elevated than others, but overall houses must be around 11.5 feet or higher.”

Miami’s Corporate Migration Continues

The ongoing influx of companies relocating to Miami continues reshaping the city’s landscape and real estate market. “We have over 200 companies probably moving down here,” Ulloa estimates.

Living in Brickell, she witnesses this transformation firsthand through constant construction activity. The pace of development has dramatically altered Miami’s skyline in just a few years, with numerous projects scheduled for completion before 2030, many timed to coincide with the 2026 World Cup.

A Market Finding Its Footing

As 2025 progresses, Key Biscayne’s real estate market appears to have found stable ground after a challenging period. The combination of stabilizing mortgage rates, pent-up buyer demand, and continued appeal to both domestic and international investors has created favorable conditions in this premium island community.

While challenges remain, from managing seller expectations to addressing climate concerns, the overall trajectory appears positive. For the Giulietta Ulloa Group, which has weathered multiple market cycles over nearly three decades, this renewed activity represents a welcome return to normalcy after an unusually quiet period.

The Key Biscayne market’s recovery may serve as a bellwether for Miami’s broader luxury real estate sector, demonstrating that markets with unique value propositions and strong fundamentals can rebound quickly when conditions align.