By Robyn A. Friedman
City & Shore Magazine
If you haven’t been to Miami lately, it’s time for a drive down I-95 to check out what’s happening 30 miles south.
You might be surprised.
Miami and Miami Beach have become playgrounds for the world’s über-rich, and the asking prices of new condominiums are breaking records. According to the 2015 Knight Frank Global Cities Survey, Miami is the sixth-most important city in the world for ultra-high-net-worth individuals, second to New York City in the United States.
Here are a few things you may not know about Miami’s real-estate market.
The Americans are back.
In the past, Miami’s market was driven by international buyers – particularly Latin Americans, many of whom were seeking a safe investment for their money. But the recent strength of the U.S. dollar has made real estate more expensive.
“Foreign investors can’t afford Miami any longer,” says Peter Zalewski of Condo Vultures, a real-estate market intelligence firm in Miami. “So their destination of choice is increasingly Hollywood, Hallandale or Fort Lauderdale.”
Prices are stabilizing, but records are still being set.
According to Jay Parker, CEO of Douglas Elliman’s Florida brokerage, the real-estate market in Miami-Dade County is “patchy.” In other words, what’s happening in Miami Beach may be very different than what’s happening on Brickell Avenue. The overall trend, he says, is “a slowdown in velocity, fewer transactions and vulnerability on price because there’s increased inventory.”
That bodes well for those on the sidelines who can capitalize on what’s become a buyer’s market.
Still, some well-positioned properties are trading at record prices – New York City prices, in some cases.
A penthouse at Faena House in Miami Beach that sold for $60 million in September broke several records – and is back on the market for $73 million, Parker says.
In June, lawyer Jim Ferraro purchased a 6,644-square-foot penthouse at Palazzo Del Sol on Fisher Island that was listed for $27 million. That was the second of three penthouses to go under contract. The first was sold to a Russian buyer for $35 million – more than twice the highest sales price previously recorded on the island.
Condominium units are getting bigger.
Buyers today want large units, whether they’re sizing down from a suburban mansion or purchasing a second or third home for vacations with the family.
“The type of buyer that buys luxury apartments wants a big unit,” says Carlos Rosso, president of Related Group’s Condominium Development Division. “They are not coming to Miami to stay in a 1,200-square-foot apartment.”
The river is experiencing a renaissance.
Waterfront property is in demand, but available beachfront has nearly vanished, and what’s left is pricey. So developers are setting their sights on land abutting the Miami River, which has been cleaned up and beautified.
“People love to see the water, and the Miami River is an extension of that,” Rosso says. “It’s really a fantastic attraction. There are beautiful restaurants now being built on the river, and I think that’s the future of Miami.”
There’s a growing price differential between Fort Lauderdale and Miami.
According to ISG World, a sales-and-marketing firm, in 2015, the average sales price of a Fort Lauderdale condominium built after 2005 was $600,273, compared to $1.7 million in Miami Beach. That’s why buyers are pushing north into Broward, where developers are touting the “affordable” prices for luxury projects such as Auberge Beach Residences and Spa in Fort Lauderdale, with prices starting at $1.5 million.
“With the small amount of inventory that developers have left to sell on Miami Beach, there’s nothing in the tea leaves that suggests that prices are going to drop,” says Craig Studnicky, ISG World co-founder. “That makes Fort Lauderdale one hell of an interesting buy because it has only one place to go – and that’s up.”