If you’re assessing STR opportunities in South Florida for 2026, now is the time to underwrite with precision—not assumptions. Florida Property Group can work with you to evaluate submarket performance, stress-test cash flow, and identify properties that still pencil in a normalized market.
Talk to our team to review active opportunities and align your next acquisition with today’s realities, not yesterday’s hype.
After two years of elevated borrowing costs and constrained deal flow, South Florida’s real estate market is entering 2026 on firmer, more investable footing. Interest rates are easing, transaction activity is stabilizing, and pricing growth—while no longer explosive—is returning to a more rational, forecastable range.
For short-term rental (STR) investors, this is not a return to the speculative frenzy of 2021–2022. Instead, 2026 presents something arguably more valuable: a balanced market where disciplined buyers can negotiate, underwrite conservatively, and scale with less volatility.
Interest Rates: The Primary Catalyst for 2026 Activity
Mortgage rate forecasts from the Miami Association of Realtors and Fannie Mae point to average rates settling around 5.8–5.9% by the end of 2026, down meaningfully from recent peaks. While this may not sound dramatic on paper, the impact on deal economics is material.
On a $500,000 loan, a rate reduction of this magnitude translates to over $100 in monthly savings, improving debt service coverage and expanding buyer purchasing power. More importantly, these rate shifts are influencing market behavior on both sides:
- Buyers are re-entering negotiations with greater confidence in long-term hold assumptions.
- Sellers, particularly those who locked in ultra-low rates years ago, are increasingly willing to list as affordability improves and replacement housing becomes feasible.
For STR investors, lower rates help stabilize cash flow projections and reduce reliance on aggressive revenue assumptions—an essential shift in today’s underwriting environment.
Inventory and Sales: A Healthier Market, Not a Hot One
One of the most notable changes heading into 2026 is gradually improving inventory. As rate pressure eases, more homeowners are expected to sell, expanding buyer options after years of scarcity.
Single-family home sales across South Florida are projected to rise modestly, with median prices increasing approximately 2–4%. This is not speculative growth—it is supported by:
- Continued job expansion in healthcare and technology
- Population inflows tied to corporate relocations and remote work
- Persistent demand for lifestyle-driven housing near coastal and urban hubs
For STR operators, this environment favors selectivity over speed. Buyers have time to analyze zoning, revenue history, insurance costs, and operating margins—advantages that were largely unavailable during peak-cycle competition.
Condos: Stabilization with Caveats
The condo segment, which faced sharp headwinds in 2024–2025 due to post-Surfside regulatory reforms and rising association fees, is showing signs of stabilization.
While transaction volume remains below historical norms, sales declines are expected to moderate in 2026, aided by lower interest rates and regulatory clarity. That said, higher HOA fees continue to pressure cash flow, particularly for STR-focused investors.
Luxury condo developments, however, remain a distinct submarket. New inventory continues to attract finance, tech, and international buyers, supporting pricing at the top end. For investors, condos may still work—but only with:
- Conservative fee assumptions
- Clear STR allowances
- Strong nightly-rate demand drivers (location, views, amenities)
The Affordability Constraint—and Why It Still Matters to Investors
Despite easing rates, affordability remains a structural challenge. In Miami, fewer than 1 in 200 homes are affordable to the typical local household, even with ongoing wage growth. This dynamic has two implications for investors:
- Rental demand remains resilient, particularly for well-located STRs and mid-term rentals.
Policymakers may pursue reforms—such as potential property tax adjustments in 2027—that could influence near-term pricing as buyers move ahead of policy changes.
For experienced investors, these pressures reinforce the importance of buying assets that can perform across multiple rental strategies, not just peak STR conditions.
What This Means for STR Investors in 2026
The 2026 South Florida market rewards discipline. Deals that pencil only under aggressive assumptions are increasingly exposed, while properties that work under conservative forecasts are gaining favor.
Key takeaways for STR-focused investors:
- Lower rates improve cash flow but do not eliminate the need for stress testing
- Inventory growth creates negotiation leverage not seen in recent years
- Modest price appreciation supports long-term equity without overheating
- Regulatory clarity makes due diligence—not speed—the competitive advantage
Final Thought
South Florida in 2026 is not about chasing momentum. It is about positioning intelligently in a market that is normalizing. For investors who prioritize underwriting, location fundamentals, and flexible exit strategies, the coming year offers a more predictable—and potentially more scalable—environment for STR acquisitions.
If you are evaluating opportunities or want to understand how current market shifts impact STR performance in specific South Florida submarkets, Florida Property Group can help you assess deals with clarity and confidence.