2017, A Silver Lining for The Luxury Real Estate Market in Miami
By: Ismael Rodriguez
ONE Sotheby’s International Realty conducted a year-end report that marked 2017 as a buyers market in Miami, particularly because of the ample availability in luxury options, prompting sellers to reduce their prices in the $1 million to $5 million range.
Anthony Graziano, senior managing director for Integra Realty Resources, linked the results to consumer hesitance through the end of a blockbuster election season and a gradual increase in their confidence.
“I think a lot of people delayed purchasing decisions, waiting to see what was going to happen in the economy and the election and everything else,” Graziano told the press.
In 2016, single-family homes in Miami-Dade County had a 36 percent increase in availability within the $1 million to $5 million range than in 2012, according to the report. The number of homes in that range also escalated to nearly 25 percent in 2015 over 2012, while prices fell by 3.5 percent.
The report also revealed that Brickell, downtown Miami, Edgewater and Midtown continue to lead the luxury market, netting almost 60 percent of all new units being delivered between 2017 and 2018. After 2018, Sotheby’s predicts the construction of units to shift over to Miami Beach, Sunny Isles and Hollywood Beach.
Also encouraging buyers is the ghost of higher interest rates, which are expected to increase twice in 2017.
“If interest rates are continuing to go up and the market senses that, that’s going to bring people up from the sidelines to buy at this price and lock interest rate for five or six years,” Graziano told the press.
Prices in the condo sector are also expected to drop thanks to a halt in Latin American investors, paving the way for an influx of domestic buyers and those from Canada and Europe.
As a result, the overall condo market is expected to remain in constant change.
The loss of Latin American investors will lower waterfront property prices by another 5 to 8 percent, while non-waterfront properties are expected to lower their prices by 3 percent, marking 2017 as a swell time to buy a resale condo.