Many luxury homebuyers are moving to Miami from coastal metropolitan centers for tax purposes. See how this migration has affected the housing market for single-family homes and condominiums.

Overall trends

With the release of Coldwell Banker’s annual Global Luxury Report, agents can get a better understanding of what the top 1 percent look for in their homes. One trend with luxury homebuyers noted in the report was the movement of wealthy buyers from “traditional luxury hotbeds in the biggest cities” to more cost-effective areas with lower property taxes.

Additionally, researchers found the luxury home market has witnessed a push towards “the broad concept of wellness,” which has come to include the expectation of eco-friendly technology and sustainable building practices.

Demographics are changing this group too. The luxury market has seen an influx of millennial buyers and buyers from the LGBTQ community, with “LGBTQ individuals control[ling] upwards of $1 trillion in annual buying power, conferring an economic clout on par with that of the total millennial generation.”

Shifting desires

Using data from a poll of Coldwell Banker luxury property specialists, the report outlined the most and least desirable features of luxury homes. Seventy-two percent of respondents noted that “outdoor living spaces are a necessity for today’s affluent homebuyer.” Respondents also observed that luxury buyers were looking for homes with multifunctional rooms (that served as flex spaces), vehicle storage, home automation, open concept floor plans and au pair suites.

Under the umbrella of home automation, buyers were looking for smart security systems, temperature control, automated lighting, wireless sound systems and electric car docking stations. Wealthy buyers also showed a preference for homes that were newly built or move-in ready.

On the other hand, when asked about features that wealthy people find undesirable in a home, 40 percent of luxury specialists said that “highly customized features” were considered a negative. Specifically, tennis courts and indoor pools are of waning interest to affluent homebuyers.

An interesting trend that has recently emerged is a disinterest in homes with large square footage. Although still within a minority, 32 percent of respondents said their customers preferred smaller homes. “Boomers want to downsize, and millennials will sacrifice square footage for in-town locations near the action,” according to the report.

What’s happening locally

In the report, Danny Hertzberg of Coldwell Banker Realty in Miami noted a trend that many in the area have noticed: “A notable trend in Miami is the increased presence of ultra high-net worth domestic buyers moving for tax purposes. These buyers are driving our luxury market and are coming from high income tax states such as New York, New Jersey, and California.”

The top five percent of Miami’s luxury single-family home market experienced modest growth year over year, and the situation continues to be a buyer’s market. Since last year, the median list price has increased by slightly less than 5 percent, reaching $2.2 million. Similarly, the median sold price grew by 7 percent, landing at $1.83 million. The median list-to-sales ratio also increased slightly compared to last year and now falls above 92 percent. Additionally, the median days on the market for luxury single-family homes increased by 28 percent, with homes sitting on the market for up to 199 days on average.

Luckily for Miami’s wealthy buyers on the hunt for luxury condominiums, the market continues to favor buyers. The median list price and median sold price for luxury condominiums have remained static: In 2020, the median list price was reported at $1.7 million, which is only a $15,000 increase from last year. Similarly, the median sold price this year reached $1.6 million, which is a $6,000 decrease year over year. The median list-to-sales ratio has increased slightly to 91.8 percent. The median days on the market for luxury condominiums is 201, up 32 days from last year.