Miami has officially been crowned the riskiest housing market in the world, surpassing notoriously expensive hubs like Los Angeles and New York.
As Florida’s tax-friendly climate continues to lure billionaires fleeing high-tax states like California, local homeowners are facing a perfect storm of record-low affordability, massive apartment repair bills and rising insurance premiums. according to a new report.
UBS’s Global Real Estate Bubble Index for 2025 ranks Miami as the No. 1 real estate market with the highest bubble risk, with a score of 1.73, well above the 1.5 threshold for “high risk.” That figure exceeds the peak of the 2006 housing bubble.
“Over the past 15 years, Miami has shown the strongest inflation-adjusted home appreciation of any city in the study,” the report said.
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“Cities with elevated or high bubble risk continued to disconnect from fundamentals: over the past five years, inflation-adjusted home prices rose by almost 25% on average, while rents rose by about 10% and incomes by about 5%,” the report continues.
An aerial view of high-rise residential towers and single-family homes in Miami Beach, Florida. (Getty Images)
“In contrast, prices in moderate- and low-risk cities fell by about 5%, while rents and incomes remained largely flat. Historically, worsening affordability and widening gaps between prices and rents have served as precursors to housing crises.”
While Florida remains attractive because of its zero income tax and a potential zero property tax, the report notes that the state’s middle class is being hit by regulatory pressure as owners of older apartments are hit by rising maintenance and reserve costs.
“While price growth is expected to turn negative in the coming quarters, a sharp correction seems unlikely at this stage,” the report said.
The Magic City has been a fiscal haven for names like Amazon founder Jeff Bezos, venture capitalist Peter Thiel, Google co-founders Larry Page and Sergey Brin and Meta CEO Mark Zuckerberg — some of whom recently left California in anticipation of a proposed wealth tax.
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Steve Moore, co-founder of Unleash prosperity, and EJ Antoni, chief economist of the Heritage Foundation, discuss Bernie Sanders’ push for a billionaires tax in California in “The Bottom Line.”
“Miami’s coastal appeal and favorable tax environment continue to attract newcomers from the western and northeastern US, while real estate prices remain well below those in New York and Los Angeles,” notes UBS.
Miami and Los Angeles lead the US in the risk of bubbles, as issues of “law and order” or “quality of life” in cities like San Francisco influence their housing trajectories, the report adds.
