Miami is a popular place these days for a whole host of reasons, namely that it's sunny and warm, it doesn't have state income taxes, and the broader market doesn't seem to think that climate risk will pose an insurmountable challenge in the foreseeable future.

But beneath the surface, there are shifts taking place. HOA fees and insurance premiums are rising (some people have a different view of climate risk), and the city is becoming increasingly unaffordable for the middle class.

Between July 2024 and July 2025, Miami-Dade County lost an estimated 10,115 residents. This was the third-largest absolute population drop of all US counties last year, though it should be noted that this can be largely explained by changing immigration policies and a meaningful decrease in international migration.

There are still plenty of people moving to the city; they just tend to skew richer. According to data from 2023, the average inbound salary was $178,000, and the average outbound salary was $89,000. The net result (via the Miami Herald):

Higher earners are moving here, lower-wage workers are leaving and the population as a whole has started to shrink. That's not good for a community's long-term economic health.

Wealth is a good thing. But is it now too much of a good thing? At the very least, it demonstrates the fragility of finding the elusive equilibrium between being a successful city and remaining affordable and accessible to the middle class.

To paraphrase Jane Jacobs, "The more successful a city is, the more it is under pressure to be something else."

Cover photo by Sarah Thorenz on Unsplash

Prediction markets have become a big deal, presumably because a lot of people like betting. But functionally and economically, prediction markets are also supposed to be about information discovery. If you get enough people researching, analyzing, and thinking about something, eventually the "wisdom of the crowds" should prevail and something resembling the truth should, in theory, emerge. The stereotypical use for a prediction market (also referred to as an event market) is a binary bet. Will this happen? Yes or no.

But now, you can also bet on real estate prices:

Parcl, the real-time housing data and onchain real estate platform, and Polymarket, the world’s largest prediction market, today announced a partnership to bring Parcl’s daily housing price indices to a new suite of real estate prediction markets on Polymarket.

The partnership will introduce housing-focused markets that settle against Parcl’s published price indices, giving traders and analysts an objective, data-driven reference point for forecasting where home prices are headed. Polymarket will list and operate the markets; Parcl will provide independent index data and settlement reference values designed for transparent verification.

Housing is the largest asset class in the world, but it’s still hard to express a clean view on price direction without taking on property-level complexity, leverage, or long timelines. By combining Parcl’s daily indices with Polymarket’s event-market structure, the partnership offers a simpler way to trade housing outcomes, with clear settlement rules and public, auditable resolution data.

Here's a specific example: What will the median home value in Miami be on February 1?

Right now, the market seems to believe it will be greater than $1.1 million. This is fascinating. Among many other things, it gives us a clear and real-time sense of market sentiment. But as Matt Levine wrote in Money Stuff, it also gives homeowners the ability to hedge and diversify their housing market risk. If you live in a cold, high-tax place and you're super envious of everyone moving to Miami, you could, of course, just sell your house and move there too. But if you don't want to do that and you still want to participate in its growth, now you can just bet on its home prices using this derivatives market.

Cover photo by Cody Board on Unsplash

One of the big housing stories of this year was that Austin has built a lot of new apartments and it is now causing rents to fall precipitously — by as much as 22%. The market is working.

But as we also talk about on this blog, the benefits of new "luxury" housing don't just apply to those who can afford it. Since real estate development happens on the margin — in other words, it's based on the feasibility of the next unit of housing supply, not an average for the market — new market-rate housing typically needs to cater to the top end of the market. Otherwise, it wouldn't be economically feasible to build it.

However, study after study also shows that the delivery of any new housing in a city broadly tempers rents, including in a city's oldest housing stock. This is true in virtually all cities:

The above chart is from this recent Bloomberg article, talking about how "luxury apartments are bringing rents down." But if you look closely, there is one city on this chart that appears to be an outlier: Miami.

Despite adding a respectable number of homes, rents have not fallen as much as you might expect given the figures for the other cities on this list. The intuitive explanation is likely that Miami is in the midst of experiencing an extraordinary wealth transfer.

For the five-year period through to 2022, it was estimated that some 30,000 New Yorkers with combined annual incomes of $9.2 billion moved to Miami-Dade and Palm Beach counties. It's also an important capital safe haven for Latin America.

I vividly remember looking at condo listings in Miami in 2008 and thinking, "Damn, this is cheap!" I even tried to find a job there after grad school, but at that time, it was no place for a new real estate developer. My best bet would have been something in loan workouts.

Who could have predicted such an incredible transformation? It isn't the third most important global city in the US according to the numbers, but it certainly has a lot of momentum right now. In this instance, new supply does not appear to be more than offsetting demand.

Cover photo by Valeriia Neganova on Unsplash