What is the current status of Miami’s luxury residential market?
Currently, there is a great demand for luxury properties in Miami. Prices are rising and sales are rising while supply is depleting. Recent sales of properties above one million dollars increased 36 percent compared to the previous year. Foreign buyers from around the world consider our prices in comparison to be a bargain. Miami is considered to be the new up-and-coming global city with a lot to offer at discounted prices per square foot. Some of the most expensive cities to buy Real Estate are Monaco, London, Singapore, Los Angeles, Paris, New York, Honolulu, Oslo, Zurich, Hong Kong, and São Paulo.
Some reports indicate that prices have been rising for the last two years, is there a concern over a bubble forming?
In Miami, more than 60 percent of closed sales are cash transactions, approximately 45 percent for single-family homes and 77 percent for condominiums. There is no threat of a bubble when the majority of transactions are all cash. Furthermore, prices are still what they were in 2003 before the last boom. Factors like population growth, business, and trade expansion are fueling demand for housing as evidenced by our significantly strong rental market. Miami has matured into a global city that attracts business, residents, tourists, and buyers from around the world. While we don’t expect to continue to see the current rate of double digit appreciation forever, we expect to see normal appreciation without fluctuations for the foreseeable future.
What do buyers expect from a luxury property in Miami?
The latest trends are open entertainment-style gourmet kitchens, ultra-luxurious wall and floor finishes, extravagant oversized closets, lavish bathrooms and tubs, at-home spas, glass and stone floors, energy efficient features, and super high-tech hand motion security systems, custom LED lighting throughout, as well as the latest in safety technology, including digitally-controlled sound systems and fully-wired smart systems controlled from an iPhone or iPad.
What are the latest trends in terms of design/architecture/amenities?
Architects and designers are now including eco-friendly materials; high-tech designed personal; at-home spas; fully equipped outdoor kitchens with built-in wood burning pizza ovens; infinity edge pools; stone surfaces and stone bathtubs; built-in, custom-designed, party-size wine cellars; glass walls; 28-foot ceilings, extra large theater rooms and media centers; in-home offices with all the latest technology; and custom fountains and waterfalls in their luxury properties.
Do the majority of foreigners buy property as a second/summer home or as an investment?
Sixty percent of buyers purchasing property in Miami are foreign buyers, and 90 percent of those buyers are buying with cash. These buyers are purchasing vacation and second homes as well as investment properties. The majority (34 percent) of foreign buyers in Florida and South Florida intend to use the property for vacation purposes, according to the 2014 Profile of Foreign Buying Activity in Florida. Twenty six percent purchase rentals for investment while nineteen percent purchase for both personal and investment purposes.
Can you comment on activity from foreign buyers in the Miami market? Who is buying?
Miami is a global hotspot attracting record numbers of foreign buyers from a diverse group of nations. International buyers helped the Miami market recover faster and stronger than any other U.S. market and continue to play a major role in our robust activity, driving sales amid very tight supply and fueling rising prices. The top Miami buyers are coming from Brazil, Venezuela, Argentina, Columbia, Canada, Mexico, France, India, Italy, Spain, and Ecuador. Miami is still the top U.S. market for international buyers.
Have you seen interest from China and Asia in general?
We are now seeing a huge interest from China and Asia and are expecting the next big wave of buyers to be coming from that part of the world. Affluent Chinese buyers have identified Miami as a top market for investment, given the affordability and growth potential that exists here. The Miami Association of Realtors is currently conducting outreach in China to include a visit from a TV station in Guangdong province, property tours for Chinese buyers and investors, and immersion courses for Miami and U.S. realtors in China.