Miami’s luxury hot luxury real estate market shows no signs of cooling down. Everyday boldface names in the media announce they are moving to Miami. From out of favor politicians to film stars to mid-list celebrities to Wall Street billionaires Miami is the current must-have address.
According to the latest Related ISG Miami Report single-family home active listings recently hit a 15-year record low. As of January 2021, in Miami-Dade, Broward, and Palm Beach counties, there were 8,597 single-family listings compared to 13,992 a year ago.
The market is becoming even more competitive as condominium sales which fell last Spring and Summer have now turned around. Listen to Craig Studnicky, co-Founder and CEO of Aventura, Florida-based International Sales Group, and RelatedISG. “What I see changing now from the height of sales in 2020 when single-family homes were in demand is now luxury condominiums are back in favor.”
“Now we are seeing a better balance with condominiums accounting for about 50 percent of luxury sales. Condo sales have roared back as we have become more comfortable living with the virus and the safety standards of wearing masks, using hand sanitizer, and social distancing,” explains Studnicky. “As a result, buyers are now wanting condominiums especially as demand for single-family homes increased while we saw significant inventory declines,” he adds.
The split in sales between condominiums and single-family homes looks like this. In Q1 and Q2 of 2020, 70 percent of transactions in Miami-Dade, Broward and Palm Beach counties were single-family homes. At the same time condominiums comprised only 30 percent of sales. Compare that to Q3 and Q4 of 2020 when condominium transactions trended up to 46 percent of sales while single-family homes were at 54 percent.
Trump’s tax reform of 2017 had lured luxury buyers from the Northeast to Florida as their primary residence before COVID. That motivator among other reasons is bringing new residents to the Sunshine state. “We are seeing more interest from California than ever before.” Studnicky said. Another sector of buyers deciding to call Florida home are first-time buyers. “The historic low-interest rates have also attracted Millennials to purchase condominiums,” Studnicky. observes.
Ron Shuffield, President & CEO, Berkshire Hathaway HomeServices EWM Realty has spent decades in the South Florida real estate brokerage business. He’s seen many markets come and go over the years. Ron explains the continuing market fundamentals moving into 2021. “One of the elements that is still impacting our market as we transition into 2021 is the number of people who continue moving to Miami to escape high taxes and flee dense city centers in the midst of COVID-19,” Shuffield explains. “The ability to work remotely has additionally influenced where buyers are choosing to live; thus, in turn, positively impacting sales in our market.”
A big mover in the luxury residential Miami market came as a surprise to Shuffield. “The biggest surprise to me is that the $5 million-plus single-family home market in Miami is exploding. In Q4 of 2020, for example, we saw a 332% increase in the number of homes sold, when compared with the same period in 2019,” Shuffield notes. “Before COVID there was not a lot of demand north of $5 million,” Studnicky confirms.
Both Shuffield and Studnicky agree single-family home prices will continue to rise. With interest rates low buying now makes sense. On the seller side now would also be a good time to put that home on the market. As always, no matter the price point homes priced well and move-in ready sell quickly.
Watch for Miami’s demographics to skew younger according to Shuffield. “Companies which are increasingly giving their employees the green light to work from anywhere have truly opened the door for this younger generation of buyers to move into the Miami market.”
That’s more good news for Miami.