‘Real Buyers but not real Stupid Buyers!’ The 2023 Market Report for Luxury Homes in Miami (Q1/Q2)

The video is segmented into two parts: first, we explore a high-end property in Coconut Grove, and then, starting at the 2:52-minute mark, we delve into a discussion about the luxury real estate market.

The Q1/Q2 2023 Report for Luxury Homes Miami. The luxury market exhibits unique characteristics compared to the broader market, which is why we dedicate a distinct section to it in our market reports. It’s crucial for both buyers and sellers to gain insight into the luxury market, as general media reports often fail to provide an accurate representation. Often the data set of sold properties is very very low, so analyzing this market neighborhood by neighborhood proves to be unhelpful as the data sets are too small to draw any solid conclusions or market direction. Before we delve into the data, here’s a key takeaway from this article:

The luxury housing market is currently facing a scarcity of available homes. With a low inventory, many so-called ‘sellers’ are fishing this tight market with incredibly high-priced homes. A significant number of these Miami sellers have unrealistic expectations. Agents, however, are happy to list in order to gain market exposure, without a real belief they can actually sell. Their goal is to test the market for record-breaking prices but don’t often care enough to want to sell at market price. This not only floods the market with fictitious listings but also paints an unattractive picture of the Miami market for potential buyers, who are confronted with a plethora of $40+ million properties that may not justify their price tag.

The market is strong, but there are too many unrealistic sellers

Luxury home sales are still as steady as they were in 2022. Prices are not decreasing because luxury properties, especially high-quality new ones, are still in short supply. However, we have not (in general) really surpassed last year’s numbers. I will make it clear: I BELIEVE WE HAVE NOT SEEN THE $10M PLUS HOME MARKET INCREASE IN VALUE SINCE SEPT 2022.

Regrettably, many luxury home sellers hold unrealistic expectations. Re-listing their homes after sitting on the market for a year unsold. This mindless ‘it’s not my fault must be the listing agent’s fault’ psychology is often encouraged by the new listing agent seeking the prestige of listing a $50 million property but hoping that time will wear the seller down or they will get lucky. I’m presently assisting multiple buyers in this high-end segment, and the actual inventory available is exceptionally limited but with that said there are numerous homes that are still significantly overpriced. Realtors frequently set asking prices based on other listings rather than considering actual closed sales. We see properties trade for good prices, but some homes are just sitting on the market with unrealistic prices. I truly believe these owners do not really want to sell and are phishing for uneducated buyers who might be pushed into a deal by an eager buyer’s agent.

Inflated Inventory

Some homes that were sold in 2020 are currently 2023 listed for sale at three times their 2020 selling price, despite no enhancements or improvements made to the properties. Numerous listings have switched real estate agents multiple times, often without recognizing that the agent was not the primary factor behind the home not selling. These homes, characterized by prolonged periods on the market, contribute to an inflated perception of the market’s inventory levels. Sometimes a deal happens after they lower the price of a home by a significant percentage. The buyer thinks they made a good deal, but really they did not. In addition, we are dealing with high-interest rates and insurance rate hikes, especially for waterfront properties. Regardless of whether these older homes have been updated, it’s the construction code under which they were built that matters for the insurance costs. Surprisingly, many sellers appear unconcerned about these factors.

So…. what Luxury Homes in Miami are Selling?

Up until September 1st, 2023, there have been 50 MLS recorded home sales above $10m In Miami Dade with an additional 20 pending to close and a number of ‘off-market transactions’ that have also closed.

Although it is hard to truly know how many off-market trades have happened a quick observation through broker chat groups and Instagram shows a VERY solid number of transactions going well under the MLS radar. Why would this happen? Well, in short good ‘off-market’ properties will have plenty of traction, and big agents and teams already have a ‘stockpile’ of willing buyers looking to pay a fair market. As DSG we do around 30% of our deals ‘off market’.

Below are links to the 2023 dry lot sales: Dry lot home sales in Q1 and Q2  and waterfront luxury home sales have closed in 2023: Waterfront home sales in Q1 and Q2. Off As for ‘off market’ deals, these are some of the big ones:

• Jeff Bezos: $68m Indian Creek
• Rick Ross $37m
• 3301 N Moorings Way. $49m

Comparing to 2022

• There were 84 homes sold by the end of last year. So considering this, we are on track to do the same number this year.

Give me some stats on the Market

The market for Luxury homes in Miami is floated with very expensive properties. There are 19 homes asking between $5000 – $10,000 per sqft! Within Miami Dade, we are seeing:

• 125 homes that are listed for $10M+ (50 Sold in this price range in 2023)
• 22 of these homes are listed over $30M (5 Sold in this price range in 2023)
• 8 of these homes are listed for $50M+ (None Sold in this price range in 2023 and only 2 sold for this price in the history of Miami). There are 19 homes asking between $5000 – $10,000 per sqft which makes them all an ‘asking record’.

Advice for Buyers of Luxury Homes in Miami

Many buyers ask me: Can we sustain this luxury market? Values in Miami have gone up; “so so much” they say, “how can I justify such numbers”. My answer is twofold. Some you cannot. But for others, it’s simple math: “Supply and demand with strangled supply chain labor and materials”. We have no shortage of buyers and the people are just not leaving at any kind of number. Luxury buyers most often want new homes and it takes us 3 years to build some properties. With that said many buyers have started to focus on Condos (although that market is not any easier now either. Please read my Luxury Condo Report for more info on that!). I can say that ‘trees do not grow to the sky’ but as construction costs go up I do expect that when a number of these new luxury homes sell, they will set new records. But that is just the norm for any market with limited supply.

Properties are staying longer on the market than before; 201 days compared to previously 155 days. Expensive homes are coming into the system and these take longer to sell, but if you look at many of the new homes being advertised so many of them are not actually finished or fully built. The moment a home is ‘move-in ready’ it will sell. So when is change coming? I believe when interest rates change. So my advice for many home buyers is that if you find the right now and the seller is real, don’t wait; “Marry the house, date the mortgage”. When rates drop we can expect another bump in the market. Unique property sells faster than generic homes, that’s a fact. Call me and I will tell you if and how unique a property is.

Finally, talk to me about ‘off-market opportunities’. I have a very solid number of ‘off-market $10m homes and Condos on my books and we call and reach sellers every day, so this number only grows! Remember, if you do what everyone else does, you get what everyone else gets!!

Advice to Sellers of Luxury Homes in Miami

I appreciate that inventory around you is limited, but if you are a real seller, do not price according to the ‘whatever you want’ mentality. It really won’t help you in the long run and the initial impact of a correctly priced home really can create such a market reaction that you sell over market price. You can break records but you cannot destroy them! Take advantage of the being ‘truly new to the market’ and don’t burn time by being massively overpriced. Buyers are really savvy now. For very very unique properties you want to have a ‘very unique story’. Please call and ask how I might suggest selling your property. In truth, luxury sales are a lot of work, so unless your agent is pulling out all the stops and doing a lot to get exposure, you are in the wrong hands! As always I have been doing this for 15 years and hold records in many neighborhoods, so please call me.

Read our other neighborhood and luxury reports

If you would like to get perspective on other specific neighborhoods or luxury reports. Please click here to go to our main database of reports. We update these every 6 months.

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