M
iami's condo market may be due for a correction, according to a report from UBS that identifies it as having the highest bubble risk globally. The city's housing prices have risen by nearly 50% since 2019, with seven percent of that growth occurring in the last four quarters. This surge has decoupled from income and rental growth, creating significant imbalances in the market.

    The luxury oceanfront property shortage is driving up prices, as wealthy individuals compete for a limited supply. Additionally, new regulations requiring condos over 30 years old to be retrofitted have flooded the market with older properties. When interest rates drop further, more inventory will likely enter the market, potentially leading to price erosion.

    Rising insurance costs due to climate change and environmental hazards also contribute to Miami's high bubble risk, casting doubt on the city's future price levels. Other cities with elevated bubble risks include Tokyo, Zurich, Los Angeles, and Toronto.