The Miami Association of Realtors released its quarterly report on the status of the city’s luxury market recently, and the organization led with the headline: Miami Luxury Home Prices, Total Inventory Rise in 2Q. What it left out was that sales were down across both luxury single-family homes and condos.
Prices were up was the advertised takeaway. Luxury properties saw a 26.7 percent rise in median sales prices in the second quarter, with luxury single-family home prices increasing 6.06 percent from the same time last year to $1.75 million; luxury condo prices jumped less drastically from $1.57 million to $1.6 million.
Inventory for both property types saw substantial increases as well. Luxury single-family listings increased 17.3 percent from Q2 2014, while luxury condo listings climbed a staggering 32.2 percent.
Prices Are Not Sales
Climbing sales prices indicate an existing and persistent demand in the sector, but declining sales suggests those sales may be aimed at specific properties rather than the market as a whole.
Year-over-year, MIAMI reported, sales of luxury single-family homes declined 10.6 percent, though homes sold nearly two days faster than they had 12 months prior.
Transactions for condos similarly dipped 9.4 percent, but without the silver lining of faster sales. Median days on market for listed condos actually increased 8.2 percent from 97 days last year to 105.
In a statement accompanying MIAMI’s report’s release, association residential president Christopher Zoller celebrated the rise in prices, saying that “Miami’s luxury properties are among the most sought-after properties in the world.” He added later: “The recent growth in luxury listings and median prices is another sign of growing seller confidence in this sector.”
The Condo Bubble
However, in a conversation with Miami Agent magazine, Keyes Company Broker and Vice President Carlos Garcia said that while single-family prices are stable up to $2 million (from where they skyrocket for waterfront homes), luxury condos are being overbuilt.
“The high-end condo market (i.e. prices beginning at $3 million) is seeing quite a few buildings going up, and they are very large,” he said, adding that they’re trendy as well, with several towers being built under a brand, like Porsche.
Garcia explained that new luxury condos are springing up all throughout the metro area, including the city proper, Miami Beach, Sunny Isles, Coconut Grove and “even Coral Gables.”
Of the pace of construction he said: “So many projects I can’t keep up.”