The short version: the Federal Reserve raised rates for the first time in three years, mortgage rates are back near 7 percent, and South Florida property is still trading. Commercial deals are closing at prices that reflect today’s debt costs, retail and industrial space remain tight, and home prices rose again in August even as the number of sales slipped. Here is what changed this month and what it means if you own property in Miami-Dade, Broward, or Palm Beach.
Interest rates: the first increase since 2023
On September 16 the Federal Reserve raised its benchmark rate by a quarter point to a range of 3.75 to 4.00 percent, its first increase since July 2023, and signaled another increase may follow before year end. The 10-year Treasury yield, which drives long-term real estate loans, is sitting near 5 percent. The average 30-year fixed mortgage moved above 7 percent the same week.
For owners, three practical effects:
- Buyers underwrite to today’s rates, not last year’s. A property that penciled at a 6 percent cap rate in 2025 has to pencil at a higher one now, or the price adjusts. Sellers who price to current financing are closing. Sellers who price to 2025 are sitting.
- Loan maturities matter more than ever. If you have commercial debt coming due in 2027, the refinance conversation should start now, while you still have options.
- Leasing is the hedge. Rents in South Florida have held up better than prices. Owners who are not forced sellers are leasing and waiting.
Commercial real estate: tight retail, steady office, industrial finding its level
Retail is the strongest sector in the region. Vacancy in Miami-Dade and Broward sits near 3.7 percent, compared with roughly 5.7 percent nationally. Well-located centers and single-tenant buildings continue to draw multiple offers, especially from 1031 exchange buyers who need to place capital on a deadline.
Office in South Florida never fell the way it did in New York or San Francisco. Miami-Dade vacancy is near 12.5 percent against a national rate above 17 percent. Broward is softer, with vacancy in the mid-teens and higher in the western suburbs, but asking rents there have risen faster than anywhere else in the tri-county area as tenants move to better-located, renovated buildings. Older suburban office is where the value buyers are looking.
Industrial is normalizing after several years of record-low vacancy. New construction has pushed Miami-Dade industrial vacancy to about 7 percent, while Broward remains tighter. Rents are holding near their peaks, and roughly 2.6 million square feet in Miami-Dade and 1.2 million in Broward are still under construction, concentrated in Doral, Medley, Hialeah, Pompano Beach, and Davie. Expect more choice for tenants and more negotiation on free rent over the next year.
Senior housing continues to trade on operations rather than headlines. Buyers are paying for census, payer mix, and clean licensing. Our own $17.9 million sale of a 205-bed assisted living facility in Pompano Beach earlier this year is a good example: both sides underwrote the business first and the real estate second.
Residential: fewer sales, higher prices, less inventory
August numbers from MIAMI REALTORS tell a consistent story across the region: fewer transactions, firmer prices, and shrinking inventory of single-family homes.
- Broward County: total home sales fell 4.5 percent from a year ago to 1,899. Single-family sales were flat. The condo median rose about 4 percent to $257,500. Single-family inventory dropped 22.5 percent, from 5,489 active listings to 4,252, and condo inventory has now declined for seven straight months.
- Miami-Dade County: the single-family median reached $680,000, up 4 percent. Single-family supply is about five months, which is balanced. Condos are a different market: more than a year of supply, longer marketing times, and buyers who are choosing carefully.
- Luxury: Miami-Dade recorded 194 sales of $10 million or more through August, already ahead of all of 2025 and on pace to beat the 2021 record.
- Condo financing: Fannie Mae and Freddie Mac ended the limited review option for many condo loans on August 3. Only 21 of the region’s roughly 2,400 condo buildings are FHA-approved. Buildings with clean reserves and completed inspections will sell; buildings without them will keep struggling.
Behind the numbers, people keep arriving. Out-of-state driver license exchanges in Broward rose 6 percent in 2025, led by New York, California, and New Jersey. That is the demand floor under South Florida prices.
What we are seeing in our own listings
The DeMarco Real Estate Group and RE/MAX 5 Star Realty currently have about 250 active listings across South Florida: roughly 100 commercial and industrial properties, split almost evenly between for-sale and for-lease, and about 150 residential listings. Office, retail, and industrial make up most of the commercial inventory. Lease inquiries are steady; sale inquiries are coming from buyers with cash or committed financing who want a price that reflects today’s rates. See the current listings here.
What this means if you own property
- Thinking about selling: get a current valuation before you decide. The right number today is not the number from 2025, and a property priced to the market still sells in weeks, not months.
- Holding: review your leases and your debt. Renewals signed now lock in rents that have held; loans due in the next 18 months need a plan.
- Buying: the sellers who have adjusted to current rates are the opportunity, and there are more of them each month.
- Managing: higher rates make rent collection and expense control the difference between a property that carries itself and one that does not. Ask us to review your management costs.
Questions owners are asking this month
Is now a good time to sell commercial property in South Florida?
Yes, if the price reflects today’s financing. Retail and industrial buyers are active, 1031 exchange buyers have deadlines, and well-priced properties are closing in weeks. Properties priced to 2025 rates are sitting.
How does the Fed’s rate increase affect my property’s value?
Higher rates raise buyers’ borrowing costs, so they pay less for the same income. In practice, cap rates move up and prices adjust unless rents rise to offset it. A current valuation shows where your specific property lands.
Should I sell my condo now or wait?
It depends on the building. Condos in buildings with completed inspections, funded reserves, and Fannie Mae or Freddie Mac approval are selling. Buildings without them face fewer qualified buyers and longer marketing times. Ask us to check where your building stands.
Want to know what your property is worth in this market? Request a confidential valuation or call (954) 453-1000. The DeMarco Real Estate Group at RE/MAX 5 Star Realty, 1901 Harrison Street, Hollywood, FL 33020.
Sources: Federal Reserve FOMC statement, September 16, 2026; Freddie Mac, Optimal Blue, and Mortgage News Daily rate surveys; MIAMI REALTORS August 2026 sales reports and Q1 2026 commercial market reports; CBRE, Colliers, and Avison Young South Florida market reports. Market figures are the latest available at publication and are subject to revision. This update was prepared with AI assistance and reviewed by The DeMarco Real Estate Group. It is general market information, not an appraisal or investment advice.
