Miami market is becoming more attractive to buyers. For instance, in the Miami Beach area, sales volume dropped 21 percent in the first quarter of 2016 (according to Douglas Elliman and Miller Samuel data) compared to the same quarter in 2015. The median price is also down from $437,750 a year ago to $408,750 now. At the same time, real estate inventory on the Beach is soaring — a 33 percent uptick in units on the market which translates to 21.5 months’ worth of supply.
Meanwhile, in the mainland market, sales volume was also down 17.5 percent in the first quarter from the previous year but the median price saw a small bump to $404,020 from $393,343. However, inventory is 10.6 months’ worth.
This means if you’ve ever dreamed of buying a place on the Beach, it’s time to keep at least an eye out!
In both markets, the biggest hit has been to the high-end luxury market. It’s important to note that this slowdown was expected and almost certainly won’t lead to an economic collapse like it did 2007 and 2008.
The reasons are pretty much well known to everyone: Volatility in South American markets and a strong U.S. dollar have dried up the once-bountiful supply of foreign buyers. Couple that with a vast crop of luxury condo towers under construction — which is driving down prices and sales, especially at the top end of the market. In fact, price for the top 10 percent of condos fell by 14.5 percent, to an average sale price of $3.13 million. Meanwhile, inventory for those properties skyrocketed 58 percent, contributing to a roughly 3½-year supply.
Even under these conditions, developers continue to announce new projects. The main driver of long-term value creation is Florida’s population growth that went from 10 million residents in 1980 to 16 million in 2000 and surpassed 20 million in 2015. For the first time in several years Florida attracted more new residents than California in 2015.