The State of the Luxury Home Market in Miami – Q1 2017

Ultra-Luxury Miami Homes – How is This Sub-Market Performing in Q1 2017

Miami real estate is known for its ultra-luxury homes and exclusive waterfront mansions. In the last couple of years there has been a lot of discussion regarding this dynamic real estate market, which experienced a boom followed by a market correction. Many media reported on the general Miami real estate market without providing for insights into the different sub-markets. This created a general and often erroneous perception of the market. The Miami market cannot be generalized, because the Brickell condo market shows a completely different dynamic than the Coral Gables home market.

Lately, we have received a lot of inquiries from buyers for luxury multi-million dollar mansions and ultra-luxurious Miami condos. This made us question whether the ultra-luxury sub-market is experiencing a resurgence and what the current status of the market is.

Below you find our statistical research combined with our findings from our day-to-day market experience.

The Average Prices per SF in the Ultra-Luxury Miami Single Family Home Market

The overview of the average prices in the ultra-luxury market ($5M+) needs to be read with caution. As this market does not see as many sales as the more affordable sub-markets and sales prices can vary from $5M to as much as $65M, results might be skewed. Therefore it is difficult to draw hard conclusions about the 2017 market as Coral Gables only sold 2 properties of $5M+ and Coconut Grove only 1. Pinecrest and Key Biscayne didn’t see any sales at all in this price range.

The two tables below show the average sales prices and the median sales prices.

What we can conclude is that, unlike the luxury condo market, the single family home markets in Coconut Grove, Coral Gables and Pinecrest haven’t seen strong price corrections and these markets have been pretty stable over the last years (as we also noticed in our day to day operations). Key Biscayne and Miami Beach, on the other hand, have seen strong price corrections in 2016. While Key Biscayne doesn’t show any sales in 2017, Miami Beach seems to be bouncing back in 2017.

The average listing prices or median listing prices show that properties are indeed still listed considerably above sales prices. Important to remark here is that in this exclusive home market, it is often hard to draw comparisons and to put a price tag on the homes’ prestigious features. Therefore, sellers are often “trying the market” to see whether they can get maximum return. It is therefore of the utmost importance that, when buying ultra-luxury Miami real estate, one uses the expertise of a very well established Miami agent who is able to value a home for what it is worth.

Months of Inventory for Miami’s Most Exclusive Mansions

Months of inventory is an important indicator to know where the market is heading. A high inventory leads to a buyers market and decreasing prices while low inventory leads to a sellers market and increasing prices.

As you can see from the graph below, most ultra-luxury single family homes markets are experiencing a strong buyers market with 18+ months of inventory. Pinecrest and Coconut Grove are experiencing a neutral, almost sellers market.

The Months of Inventory in the ultra luxury market indicate a well balanced market between 12 and 18 months of inventory and a buyers market in case of 18+ months of inventory. For readability the X-Axis with the months goes up to 100 months only.

Miami Luxury Homes Sold Versus Luxury Homes for Sale

In the table below you see how many ultra-luxury condos sold in each Miami neighborhood, with Miami Beach being the largest market. We see a slight decrease in sales in 2016 which was seen all over Miami. Miami Beach and Key Biscayne show relatively high sales numbers in the first 4 months of 2017, while Coral Gables shows relatively little movement. We will have to closely monitor the market to see what will happen in the next few months.