Price Adjustments Hit Luxury Miami Real Estate Market
The entire residential market in South Florida has flattened out a bit, which has caused the luxury real estate market to take a bit of a beating. Locally buyers are scrambling to find affordable homes with the total number of sales in Miami-Dade County falling 4.3% year-over-year, according to a report from Miami Association of Realtors.
The luxury market has seen prices start to come back to earth due to economic instability in the Latin American region, a strong dollar and overbuilding within the market. It has been hit harder than other parts of the real estate market.
With more luxury inventory than any other time in the history of South Florida real estate and lower sales, prices are adjusting. The market isn’t in a tailspin or even weak. Instead, sellers are adjusting prices to make up for the explosive growth experienced since the 2008 recession. It has become a buyer’s market and sellers are starting to accept this fact.
In 2014, the luxury real estate market in Miami peaked due to a weak dollar. Record-breaking buying has started to return to normal ever since.
Sellers Making Adjustments
Since the market is turning into a buyer’s market, sellers have been making adjustments. They have been cutting demands, especially with luxury condos.
The median sales for luxury condos throughout Miami have dropped about 32% year-over-year. Currently, sellers must accept a lower price or wait for better days. Those condos on the beat, have seen the days spent on the market go from 62 to 171 over the past year.
Election Had an Effect
During the U.S. presidential election and the time leading up to it, the condo developers reported sales has stalled. However, they have reported sales are starting to pick back up. Many have stated that 2016 was a difficult year with currently issues, Zika and the election.
Luxury single-family homes did far a bit better than the condos. In the major suburbs of Miami, median sales were up about 2.2% year-over-year.
Total sales volume throughout Miami-Dade County did drop about 16.4% from December 2015 to December 2016.
Higher-end homes may have struggled, but the middle of the Miami real estate market has been rather hot. Home sales between $300K and $600K were up 27% year-over-year, according to the Miami Realtors’ association.
With luxury prices starting to adjust and sellers taking some of their demands off the table, it’s expected the high-end market will bounce back a bit. It’s a buyer’s market and sellers will either accept what the market allows or they will wait for the market to change.