Welcome to our 2018 Miami Luxury Real Estate Report
Welcome to our 2018 Luxury Report
This year we have revamped the report in more ways than ever before. We have made it extremely easy to navigate your way through every neighborhood and for those who don’t have time to read, I have even made short, 5 minutes videos explaining the luxury movements within each neighborhood! So lets dive in…
What I have always found interesting with the luxury residential market is that it truly operates in a completely different capacity to normal ‘standard’ real estate market conditions. This, I always feel, is largely due to the fact that the same rules that apply to normal buyers (constraints, motivations and market forces) do not apply to luxury buyers. It is important not to extrapolate data from normal market reports to the luxury end of the market. If some is good, more must be better? No, not necessarily! There is a tipping point once you enter the luxury market. Luxury buyers calculate property values in a very different way to normal buyers, and micro and macro factors that drive normal buyers’ decisions do not affect the luxury buyer or seller in the same way. As I say: ‘Ford does not worry about Ferrari and Ferrari doesn’t worry about Ford’.
Now this is not to say that there are factors that don’t affect us all, but there are indicators that varyand it is important to recognize these. What we classify as luxury within this report is properties over $3M (Apart from Brickell where the threshold is $2M). This really though is the tip of the iceberg and many will consider real luxury to kick in at $5m upwards. Because the number and velocity of luxury sales is so much less than in the normal markets, it can be easy to misread or miscalculate how and where this market is moving. Will it get better? Is it stagnant? Is it about to experience a sudden jump or will it take a sudden drop?
What has been so important in understanding this market is not just looking at a bunch of spreadsheets and extrapolating what we know within the normal market, but really dealing and listening to luxury buyers and sellers and understanding what motivates them every SINGLE day. We should then look for patterns within the data based of our dialogue and conversation and there is a lot of this. Once again, it is the social narrative that gives us the best story and understanding of the market.
The Miami Luxury Real Estate Guide in Videos!
Short in time and want to know the highlights?…watch these short videos.
The Short Video on the Coral Gables, Coconut Grove and Pinecrest Luxury Markets
The Short Video on the Miami Beach Luxury Market
The Short Video on the Brickell Luxury Market
The Short Video on the Pinecrest Luxury Market
One thing is for sure, Miami is one of the most desirable destinations on the planet. Quality of life to price per SF is unparalleled and between Art Basel, The Boat Show, Beckham’s newly announced MLS soccer team and the recent announcement that Miami will be added to the list of cities for 2019’s F1 Grand Prix circuit it rivals Dubai, Sydney, London or Monte Carlo, yet at a fraction of the cost. So, it is hard to deny that Miami does have a place on the Global luxury stage and we know that this is just going to grow and grow to 2020.
Interestingly, an element that I have seen rival all of the above for driving the luxury buyers, and one that is even possibly more motivating in bringing luxury buyers to the city is the pull of Tax benefits. I have personally experienced a much higher than average engagement with company CFO’s and CEO’s moving to Miami. The commercial side of the city continues to thrive and it is not hard to see why if you can personally save hundreds of thousands of income dollar every year with a move (14.4% from NYC and around 10% for most other states). If you are one of those considering a move, please call me. It is an area that I have considerable experience in navigating.
With all this said, the last couple of years and even today we see a ‘softer’ luxury Market. There have been micro and macro factors that have caused this. Possibly a more important question than ‘how hard or soft’ the market is, is what will happen in 2019 and 2020?
Locally, on a micro level, we have just come out the back of a huge ‘Condo Construction Frenzy’. Even at the luxury level we have seen the introduction of an unprecedented level of new product previously unseen. It is no surprise to see marginal corrections. Secondly, some of the product was just too ‘gimmicky’ or was not as well finished as previously expected. It did not truly satisfy the needs of the discerning luxury condo buyer. Yet, we see some truly great product (contact me to learn everything about Miami’s best condos)
For the housing market we have seen a softening in the luxury-end, yet at the same time some record sales have occurred. How and why is this possible? A possible answer is a number of changing lifestyle trends that have pushed clients away from some of the traditional luxury product to a new definition of luxury. A streamlining of lifestyle has become more in vogue and the demand for huge palatial estates on acres of land has been replaced with smart homes in prime gated locations that cater better to a ‘lock up and leave’ jet set lifestyle.
On the flip side, the relocations of wealthy US and international families have provided a cushion of demand for primary homes with close proximity to the best schools and this will continue. If you are relocating you will additionally benefit from reading my Relocation Guide.
Turmoil in the South American economies has had both negative and positive effects. International cash flow has been somewhat stifled due to banking and immigration restrictions (Brazil and Venezuela spring first to mind) yet those able to move, have done so quickly and aggressively. Definitely call me if you fall into this category, we have already set up a bespoke native agent, set to cater to the needs of these markets. For Brazilian citizens for example we have our guide “Mudando para Miami“.
One thing is for sure. The luxury market looks like it is heading for another ‘jump’ as we see that values have corrected and luxury, but well priced deals, are now more readily available than ever before in the last 3 years. I am certainly not one to say that everything in every neighborhood in the luxury market is a deal leading to a pot of gold at the end of the real estate rainbow. There are land mines for impulsive and poorly researched buyers, but it is our job to avoid you getting financially blown up on route!