South Florida Real Estate Market Shifts Toward a More Sustainable Pace

Written by:

Steve Marcinuk

Date:

05 Jun 2025

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After a historic run of rapid appreciation, the South Florida real estate market is beginning to cool. Larry Mastropieri, Broker and Owner of The Mastropieri Group, a boutique luxury brokerage serving the region, puts it plainly. “The real estate market is softening. That’s probably the most accurate, fair way to say what’s happening,” he says.

The shift comes after years of explosive growth that made South Florida one of the most competitive markets in the country. Now, for the first time since the Great Financial Crisis, median home prices posted a year-over-year decline in March 2023, a surprising downturn during what is typically the busiest season.

With 15 years of experience as both a residential broker and a multifamily investor, Mastropieri offers a grounded view of the slowdown and what it could mean for buyers, sellers, and investors alike.

The Hierarchy of Vulnerability

Not all properties are feeling the pain equally. Mastropieri identifies a clear ranking of which assets are most at risk in today’s market:

“The most difficult property to sell right now is a condo,” he states emphatically. Following the tragic Surfside collapse in 2021, new legislation requiring major reserves and structural assessments has created financial uncertainty. “There are building evacuations, substantial special assessments, and major insurance issues as premiums have skyrocketed,” Mastropieri explains.

After condos, the next most challenging properties are homes in country clubs with high membership equity buy-ins, followed by properties in 55+ communities. Single-family homes in non-HOA or low-HOA communities remain the most resilient segment of the market.

Miami: America’s Most Unaffordable City

Perhaps the most shocking revelation is South Florida’s affordability crisis. “Miami has become the most unaffordable place to live in the United States,” Mastropieri states. “We’ve surpassed New York and LA.”

This extreme unaffordability creates a ceiling on how much further prices can rise. “These are fundamental statistics that I don’t think can be eliminated through national political actions,” he observes. Even significant interest rate drops might not be enough to address the crisis.

Why Prices Haven’t Collapsed (Yet)

Despite softening demand, South Florida hasn’t seen dramatic price drops. Mastropieri attributes this to the region’s unique buyer profile.

“South Florida tends to be a wealthy market, with many second homes and a higher proportion of cash buyers,” he explains. “These owners aren’t forced to accept lower offers. They simply remove their property from the market if they don’t get their desired price.”

This dynamic explains rising inventory alongside relatively stable median prices. However, Mastropieri doesn’t believe this standoff can continue indefinitely. “I don’t think that lasts forever,” he cautions. “There are forces propping up the market that may not be fundamentally sustainable.”

Migration Slowdown

The pandemic-era population boom has significantly cooled. “Migration numbers show a 33% decrease from previous levels,” Mastropieri points out. While corporate relocations like Citadel continue to bring high-net-worth individuals to the region, the overall pace has slowed considerably.

International buyers have also pulled back due to various factors from political considerations to currency exchange rates.

Investment Opportunities in a Transitioning Market

For investors looking to enter the South Florida market, Mastropieri offers nuanced advice:

“The fix-and-flip market is extremely competitive,” he warns. “It’s comparable to attempting flips in New York City. Some flippers are experiencing significant losses and may struggle to secure hard money loans in the future.”

For long-term investors, particularly in multifamily, the outlook is more promising. “Focus on securing properties with modest cash flow and plan to hold for 10-20 years,” he advises.

Mastropieri sees potential opportunities emerging as five-year balloon mortgages from 2021-2022 come due for refinancing. “We’re approaching the point where investors will need to refinance properties that may not have appreciated beyond their purchase price,” he explains. “If market conditions remain similar or decline further, some owners may be forced to sell.”

However, affordable housing multifamily properties in B and C-class neighborhoods continue to hold their value well due to limited supply. “South Florida’s geography, bounded by ocean and Everglades, limits new construction opportunities,” he explains.

From Engineering to Real Estate Entrepreneur

Mastropieri’s journey into real estate wasn’t traditional. With degrees in mechanical engineering and finance, he initially worked for major corporations including Waste Management and General Electric.

A side venture with a friend who worked for Blackstone changed his trajectory. “We started buying multifamily assets and aggregated about 100 apartments,” Mastropieri recalls. “I then realized it might be time to leave corporate engineering and pursue real estate full-time.”

Joining forces with his mother, who had been a top agent in New Jersey, Mastropieri began selling residential real estate in South Florida while continuing to build his multifamily portfolio. What started as a mother-son team selling around 150 homes annually has grown into a boutique luxury brokerage with 10 agents.

“I left engineering to pursue this career and would make the same choice again, but I didn’t anticipate how demanding it would be to function as a broker and build a business,” he reflects.

Looking Ahead: Cautious Optimism

Despite the challenges, Mastropieri remains personally invested in South Florida’s future. “I believe in South Florida long term,” he affirms. “I own 20 assets here, and I’m looking to buy more.”

His approach is measured and pragmatic: “I would just say dollar cost average into this market. That’s my model. I can’t time the market.”

For those with patience and a long-term perspective, South Florida continues to offer compelling investment opportunities, even as the market navigates this transitional period. The region’s geographic constraints, continued (if slowed) population growth, and enduring appeal to wealthy buyers provide a foundation for long-term appreciation.

“If you are a real estate investor focused on the long term, not seeking immediate cash returns, but rather playing the appreciation game and believing that South Florida will continue to grow, that’s probably the investor profile that can succeed here,” Mastropieri concludes.