While Miami continues to attract deep-pocketed transplants and institutional capital from across the globe, beneath the surface, the city’s housing market is failing on two key fronts: new construction and affordability.
Dotted with palm trees and bristling with amenity-rich luxury condominium towers, “Magic City” earned the dubious distinction of being 1 of 13 major U.S. metros to receive an F grade in the newly released 2026 Realtor.com® Metro Report Cards.
Out of a possible 100 points, Miami earned an overall score of just 29, weighted down by a lackluster affordability component score of 18.9, combined with a slightly better homebuilding component score of 39.1.
For context, best-in-class Des Moines, IA, which received an A+ in the ranking, earned a total score of 83.4, propelled by affordability and homebuilding component scores of 88.3 and 78.4, respectively.
Although Miami is not the worst-performing market in the nation, with Los Angeles comfortably claiming that title, it nevertheless holds a unique distinction: It is the sole failing metro located in a state that earned a passing grade on the Realtor.com State Report Cards.
“We gave the whole state of Florida a B, but Miami behaves differently, with many more restrictions on geographic expansion than other metros in the Sunshine State given the Everglades to the west and the Atlantic Ocean to the east,” says Realtor.com senior economist Joel Berner.
Geographic limitations
Experts agree that when it comes to new construction, land scarcity is Miami’s Achilles’ heel relative to the rest of the state.
“There isn’t much room for Miami to grow except up, which is why we see a large share of condos on the market there generally and a large share of luxury condos in the new-construction space,” says Berner.
This severe land constraint directly dictates the economics of residential development in Miami.
“Land is expensive, construction and labor costs are high, financing is still costly, insurance has become a major expense, and permitting and approvals can add significant time and uncertainty to a project,” Daniel Ickowicz, CEO of Elite International Realty in Miami, tells Realtor.com. “When you put all of that together, developers may still build, but it becomes very difficult to deliver new housing at lower price points.”
To put it simply, because the baseline cost of building in Miami is so high, developers watching their bottom line naturally focus on delivering luxury units at the expense of budget-friendly options.
“That’s part of the reason you can look around Miami and see cranes everywhere while still having an affordability problem,” says Ickowicz.
Data analysis confirms the divide: Miami leads the 100 largest metros in its new-construction premium—the extra market cost of buying a brand-new home versus an existing one. Today, the typical new build in Miami carries a price tag 248% higher than the median-priced resold home.
Miami as a global market
On the affordability front, Miami’s emergence as a magnet for global wealth plays a defining role for better or worse. Ickowicz notes that the city’s real estate is increasingly priced for international buyers, detaching housing values from local incomes.
“Local buyers are competing with people and capital coming from Latin America, the Northeast, Europe, and many other markets,” says the CEO. “That is very different from many other cities.”
The median earner in Miami currently spends nearly 47% of their $74,274 median annual income on a monthly payment for the median-priced home of $507,237, well above the recommended 30% affordability threshold, effectively putting homeownership well beyond reach for average working families.
City vs. state
So why is Miami dramatically underperforming compared to the rest of Florida? Both Ickowicz and Berner largely attribute the gap to land availability and cost.
“If you go to Central or North Florida, there are areas where developers can still acquire larger parcels and create entire communities,” points out Ickowicz. “Miami has much less room to expand, land is considerably more expensive, and demand is coming not only from the local population but from buyers around the country and the world.”
Berner notes that Miami’s new-home inventory also has to contend with location-specific affordability challenges that inland suburban new builds escape, including skyrocketing coastal property insurance and heightened scrutiny over condo building reserves in the wake of the deadly Surfside building collapse.
“We are dealing with a different combination of land, development costs, and demand,” confirms Ickowicz.
Elsewhere in Florida, the picture looks different. In fact, two markets—Jacksonville and Palm Bay—scored above 70 points overall, driven by high homebuilding marks that secured them A- grades and top 10 national rankings.
Lakeland, Cape Coral, North Port, and Orlando, FL, likewise acquitted themselves well on affordability and homebuilding, each receiving a grade in the B range.
According to Berner, these metros owe their impressive performance to rapid suburban expansion on low-cost land that Miami simply cannot replicate.
A path forward for Miami
Despite the bleak report card, Berner emphasizes that the state has done well to preempt local zoning codes to allow for taller and denser residential construction in commercial areas through the Live Local Act, and he believes that more creative solutions like this one are needed.
“When land is scarce, building tall and dense affordable inventory is the only solution. So rezoning parts of the metro for multifamily homes and continuing the push for accessory dwelling units will make the biggest difference.”
Ickowicz agrees, arguing that while there is no one policy that would solve affordability in Miami overnight, the key to unlocking more budget-conscious housing is greater density around transit and employment hubs.
Other crucial levers include making it easier to redevelop underused properties and reducing unnecessary delays in permitting and approvals to make the process more predictable and streamlined.
“For a developer, time is money. If a project takes significantly longer because of uncertainty in the approval process, those additional costs eventually become part of the price of the housing,” says the CEO. “Miami is always going to have some natural limitations on supply and very strong demand. We can’t change that. What we can do is make sure we’re not making housing even more expensive by making it unnecessarily difficult or costly to build.”
