September was a good month for Miami real estate. According to market data provided by the MIAMI Association of Realtors, single-family home sales increased 10.4 percent year-over-year, and condo sales increased 11.4 percent year-over-year. The luxury market saw even greater numbers, with sales $1 million and above in Miami-Dade County increasing 23.3 percent to a whopping 90 transactions last month.
Lowered U.S. interest rates are helping to fuel the increased sales, but there are a number of factors specific to Miami, according to MIAMI Chairman of the Board José María Serrano. “High earners from tax-burdened states are relocating to Miami, but not just because of monetary savings,” he said in the latest report. “Miami is home to one of the nation’s fastest-growing downtowns, the world-renowned Art Basel Miami, a global reputation for fine art and design and the most cultural institutions in the Southeast.”
Culture and even weather aside, changes to the U.S. tax code have made Florida overall very attractive to homeowners who can’t write off their state and local taxes thanks to the most recent federal tax reforms. According to data from the U.S. Census Bureau, in 2018, more people migrated to Florida than any other state in the U.S. and the highest number came from New York state, many of them high-net-worth individuals seeking a tax haven. The increased number of luxury transactions in Miami bear this out, with single-family home dollar volume in that sector rising 19.8 percent in September, from $525.7 million to $629.5 million.
According to researchers, population growth in Florida is expected to average 330,605 net new residents every year until April 1, 2024, providing a major boost to the economy and real estate market.
Year to date, Miami single-family home sales are up 1.8 percent compared to the first nine months of 2018, and condo transactions are up 0.6 percent year-to-date. Along with increased sales, prices are appreciating as well. Miami-Dade County single-family home prices increased 4.9 percent in September 2019, from $360,000 to $377,750.
Even so, Miami is still considered affordable – and therefore attractive – to high-income earners. According to Knight Frank’s 2019 The Wealth Report, for $1 million, buyers will get 93 square meters of prime property in Miami, as compared to 31 square meters in New York, 36 in Los Angeles and 16 in Monaco.
Migration of wealth and international homebuyers might help explain why inventory for single-family homes in Miami decreased 4.8 percent to 5.9 months, indicating a slight seller’s market. Buyers are not only paying top dollar for Miami real estate (95.3 percent of the original listing price as of September), a large percentage of them are cash buyers. Miami cash transactions comprised 33.9 percent of total closed sales in September, almost double the national figure of 17 percent.