It’s hard to know what to make of Miami’s luxury market. On the one hand, agents predict a gloomy future. Luxury condo prices are plunging, and the market’s stagnant with inventory. On the other hand, Florida real estate experts credit Miami’s unrivaled benefits as factors in its favor.
An October report from Douglas Elliman and Miller Samuel revealed that the average sale price for luxury condos in Miami and Miami Beach had plunged 30 percent, year over year, in the third quarter, to $948,700 and $2.6 million, respectively. It reported that the number of luxury condo sales also plunged by 25 percent in Miami and by 17 percent in Miami Beach.
Then, there was the pop up of luxury buildings during the boom years of 2013 to 2014 that was imploding an already glut-filled, high-priced market. The result is that you have properties lolling on the market for an average of 126 days, more than double last year’s number.
Then again, perspective is relative. Compared with Palm Beach, Miami sees less growth, with luxury prices tumbling 10 percent over the past year to an average of $1.4 million.
As Monica Venegas, owner of Venegas International Group, put it: “Miami will always be a global destination with investors from around the world.” Buyers tend to pay an average of $6000 per square foot for upper-crust property in cities such as New York, London, and Singapore. In Miami, you can pocket mansions for half that price.
One driver is hedge funds that are either opening up subsidiaries in Miami, or transferring their offices from New York to its shores.
“The benefit of being a Florida resident for tax purposes has trickled many funds to look towards Florida, since we do not pay state income tax, and the cities of choice, have been Palm Beach or Miami,” says Ivonn Goihman, owner of the Goihman Group.
Agents like Miller Samuel’s Jonathan Miller lament that the market is overstuffed and will likely get worse before it gets better.
Jill Eber of The Jills observes that at the end of the day, high-end buyers keen back to the land, and Miami boasts views, prestige, and almost unrivaled benefits. Celebrities live here; Old World wealth does, too.
Images courtesy of Monica Venegas / Ivonn Goihman