Coconut Grove Real Estate News and Market Trends for 2018

The Coconut Grove Home Market in 2017 and Our Expectations for 2018!

We analyze how the Coconut Grove real estate market performed in 2017 and we will discuss possible scenarios for the Coconut Grove home market in 2018. By looking at market indictors, the real estate business cycle and our daily “out-in-the-field” experience we will try to draft an outlook for 2018. This report focusses only on the Coconut Grove market and divides the market into 5 different price ranges to make it extremely actionable for both sellers and buyers.

Prices and Price Changes in the Coconut Grove Real Estate Market

Coconut Grove Real Estate News and Market Trends for 2018

*This sudden decrease was caused by the fact that in 2014 sold relatively few waterfront homes in this range, which affects the average price per SF. 2013 and 2015 saw numbers in line with normal sales

In the table above we provide you with the sales prices per SF for Coconut Grove homes in 2017 and we compare these prices with previous years. As can be seen from the data, prices in Coconut Grove have stabilized after they corrected in 2016. The Grove has experienced a considerable growth in value in the last years, which came to a stop in 2016 (especially in the luxury markets). In 2017 the lower ends of the market remained stable in price while the higher ends of the market saw a moderate increase in prices.

The two tables below indicate the months of inventory and this might be the most important indicator in the real estate industry.  Months of inventory show you the supply and demand relationship which is key in predicting future price changes. As you can see from the tables, the Coconut Grove market is seeing very low numbers of inventory. The market is pre-dominantly a sellers market, while the more affordable homes are experiencing a buyers market. This means that the market will most likely see an increase in prices while the lower end of the market will need some moderate price adjustments.

What does sellers or buyers market mean?

  • A sellers market (With 6 or less months of inventory – and 12 or less months in the Luxury $1M+ market) means that there is more demand than supply, mostly leading to an increase in prices and providing sellers with an advantage.
  • A buyers market (With 9 or more months of inventory – and 18 or less months in the Luxury $1M+ market) means that there is more supply than demand. Prices are likely to decrease in order to absorb the supply.
  • A neutral market provides for a perfect balance in which neither party has an advantage and prices are likely to remain stable
Coconut Grove Real Estate News and Market Trends for 2018
Coconut Grove Real Estate News and Market Trends for 2018

Buying a Coconut Grove home in 2018

We are bullish on the Coconut Grove real estate market; prices are increasing and there is a limited amount of months of inventory. Having said that, we still want to warn our readers and buyers to pay the right price. The table below provides you with an overview of the lowest prices per SF, the average and the highest prices per SF in 2017. This table provides you with an insight as to what you should be offering for a Coconut Grove home for sale. For example a fixer upper for $1,3M that is priced at $430 per SF will not be a good deal. As you can see that is the average price in the market while the lower-end is selling at approximately $300 per SF.  If the listing is asking $550 per SF you should only go ahead if it is well finished as this is the top price in the market. There are of course homes listed for prices above the upper levels indicated in this graph. If you find a home that is listed far above market price, make sure the house has the features to justify this price (such as a waterfront lot, located in a desired gated community or high-end finishes to name a few)

Coconut Grove Real Estate News and Market Trends for 2018

When looking to make an offer one should know the below data. These are differences in percentage between the original asking price and the sales price. You can see that in ’12, ’13 and ’14, the year in which prices increased the most, there was around 9-10% negotiability in the different markets, increasing to 12% in 2016. 2017 Saw approximately a 11% change between the listing price and the price paid.

Coconut Grove Real Estate News and Market Trends for 2018

Trends in Coconut Grove for 2018

The table below shows the price range distribution over the years. While 2012 saw 18% of homes being sold above $1,5M, today that is 40%.

Coconut Grove Real Estate News and Market Trends for 2018
Coconut Grove Real Estate News and Market Trends for 2018

Where are we in the real estate cycle?

People often look at the real estate cycle just focusing on the prices. They see rising prices for a certain period of time and expect the market to collapse. There are more factors in play here such as a sudden change in demand or supply, interest rates, employment and other factors. Looking at the table above we see the last burst and todays market. As you can see Coconut Grove prices saw a peak in the 2008 with a very high inventory in the months (even years) afterwards. With a massive inventory prices need to come down to stabilize the market. Looking at today’s market we saw a considerable rise in prices in 2013 and 2014. Inventory however stayed stable with here and there a period with a slight increase. We did see some minor price corrections in Coconut Grove but, the fact that the inventory did not increase means the market is balanced and prices are likely to keep on rising.

Tips for Buyers in 2018

As mentioned before we are bullish on the Grove market. Inventory levels are very low and values are increasing. The lower end of the market is experiencing a buyer’s market as prices have seen a considerable increase over the years. It seems this end of the market will need a small price correction in order to attract more buyers. My experience with the $2M – $2,5M market especially, is that it is softening. Sales is slowing down and price corrections are most likely to happen. As a buyer it is essential to know the numbers in order to pay the right price. As we are approaching the end of the economic cycle we will not see any more big increases. The market will remain stable, but will not see any more big price surges. The Grove together with Coral Gables are two of Miami’s strongest markets and as long as you stay within the right price range you will be making a solid investment.

Tips for Sellers in 2018

With low inventory levels, this is a good moment to sell. Especially in the $1M-$2M range I see a lot of demand while there are not always great quality homes (Homes that justify their asking price) available in this price range. If you own a home of $1M -$1,5M you are in a good position to sell, but as buyers are generally hesitant to pull the trigger these days, pricing your property correctly is still essential. We are approaching the end of an economic cycle and we wont see any more massive price surges.

David Siddons is top producing Miami realtor with over $65M in yearly sales. He has lived and worked in Coconut Grove for the last 10 years and knows this market like nobody else. Known as a market analyst and author of several Miami real estate market reports, David’s expert opinions are highly regarded by industry peers, buyers, investors and sellers.

Contact David Siddons today for more information on the Coconut Grove real estate market

+1.305.508.0899 | David@siddonsgroup.com

FAQ

These are the most commonly asked Google Real Estate Related questions

1. What are the Current Best New Condos in Miami?

If you want to hear in more details our opinions on the best new Miami new construction condos. Please read this article:Best New Construction Condos 2022-2023

2. What is the best New Construction Condo in Fort Lauderdale?

In our opinion, the Residences at Pier Sixty-six are certainly the most interesting and unique. Already well underway this 32 Acre project will be home to the first of its kind Marina where owners will be able to anchor up vessels up to a staggering 400 ft! For specifics of this project see our independent review of this project.

3. How can I compare the new luxury construction Condos to the best existing Luxury Condos in Miami? 

Our Best Luxury Condos in Miami article will prove to be very useful to those looking to compare the existing to the new. You may also want to watch this video which shows the performance of the best Condos in Miami over the last 15 years!

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