South Florida's housing market has slowed down from the torrid pace of the past several years. Yet, an annual ranking of global markets still ranks Miami as the riskiest in the world.
However, that's not a prediction of an impending collapse of home prices, said Jonathan Woloshin, head of U.S Real Estate Research at UBS Global Wealth Management.
"But certainly the risk levels are higher," he said.
The 2025 report marks the second consecutive year UBS has ranked Miami's housing market at the top of its real estate bubble index. The analysis defines a bubble as "a substantial and sustained mispricing" of homes.
South Florida's appearance at the top of the list comes after several years of big price jumps, especially of single family homes.
" Miami's been a great market," said Woloshin. "And look, trees don't grow to the sky, as we know."
Median single family home prices have jumped at least 70% since the summer of 2019 across the three major counties in the region. Nationwide, the median price of an existing home is up 50% over the same time period.
"The Miami market is still very, very good," Woloshin said, citing a growing population feeding increasing demand for housing.
Lately, home price growth has slowed considerably even as more homes hit the market. Affordability challenges have been mounting with mortgage rates and insurance costs driving some younger buyers away. The Miami region continues to have one of the lowest unemployment rates among major metropolitan areas in the country. It was 3.7% in August. September data was not released by the Department of Labor due to the federal government shutdown.
Job growth is one reason why Miami Association of Realtors Chief Economist Gay Cororaton said regional housing price growth is reflects strong economic fundamentals.
In a blog post written in response to the UBS bubble ranking, Cororaton wrote, "the price appreciation has been due to demand and supply fundamentals rather than by speculative activity and easy credit conditions that characterized the housing bubble that precipitated the Great Recession."
"I don't think what's going on in Miami is irrational," Woloshin said. "But you could argue, 'Is it overdone to the upside?' It's certainly possible."
Woloshin pointed to the gap between median home prices and median household incomes in the region.
READ MORE: How taxes on homeowner profits could be slowing down South Florida's housing market
Data from the Miami Association of Realtors had found people moving into Florida from out-of-state bring with them higher incomes, which have helped boost home prices. The median household income in the region was about $76,000, according to the latest data from the Census Bureau. That income supports a mortgage for a home around $300,000, well below the median price of a single family home in the region.
A wildcard for the Florida housing market is the future of property taxes. Gov. Ron DeSantis has endorsed reducing, capping or eliminating most local government property taxes. Statehouse Republicans have proposed several bills, including options such as increasing exemptions or a 10-year phase out of some property taxes. Any change would have to be approved by voters as a constitutional amendment.
" You eliminate property taxes and you're going to push up home prices," Woloshin said.
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