Sales Dramatically Slowing Down In Miami’s Luxury Real Estate Market (Sarasota: 2015, rental)

[lluvia]

Sales Dramatically Slowing Down In Miami’s Luxury Real Estate Market « CBS Miami

[elchevere]

yup...with anywhere from 3-5 years of inventory on the market now, NOT including new projects that will come to market shortly (Related Group just pulled the plug on its Auberge project), there will be some excellent deals available to patient buyers over the next 6-18 months.

[MadManofBethesda]

Originally Posted by elchevere

yup...with anywhere from 3-5 years of inventory on the market now, NOT including new projects that will come to market shortly (Related Group just pulled the plug on its Auberge project), there will be some excellent deals available to patient buyers over the next 6-18 months.

Perhaps.

But then again, there are always people warning about an impending real estate collapse. In fact, we have one regular on the board who warned people in 2012 not to buy real estate in Miami because a collapse was imminent and you'd be able to buy condos and houses for pennies on the dollar. He made the same claims in 2012, 2013, 2014...well, you get the picture.

Can you imagine someone who took his advice five or six years ago and waited for prices to drop?

[elchevere]

Nothing goes up forever..trust me, California and NYC which have had more real estate booms than Florida, correct. I am not expecting a crash but I do not believe a 10-20% correction is far fetched...every time I hear "this time it's different" (real estate, stock market, etc) it is not. If you plan on living in and/or holding on to your current property 5, 10, etc more years you should have nothing to worry about. Speculators and/or distressed sellers are the ones who will get hurt short term. I am hearing the same thing from friends of mine in NYC now who are luxury real estate agents there....and the owner featured in article (above link) stated he dropped his price by $1 MILLION and it is still sitting on the market.

[MajesticPalm]

Corrections are normal and healthy part of any market. Otherwise things either are overbought or oversold.

Miami's correction is coming from a place of a 5-6 year run on real-estate prices. It's time to correct.

The correction will be mostly felt in the all the new luxury condo's in Downtown, and then Brickell. Houses should be fine, or will correct ever so slightly.

I always found the Brickell and Downtown boom to never be fully justified, and I've had realtors even admit to me that they're targeting foreign investors, who don't know any better. Some of the units are basically only advertised in foreign countries like Brazil.

As a result the strength of the dollar, and the strength of those foreign economies drive real-estate way too much in those key areas.

Then there is the slow and steady rise of interest-rates, making it more difficult for many to qualify for mortgages (especially condos) and hence the demand is shrinking. Though most condo buyers are buying their second or third property and can afford to be picky.

[Marc Middleton]

Originally Posted by MajesticPalm

The correction will be mostly felt in the all the new luxury condo's in Downtown, and then Brickell. Houses should be fine, or will correct ever so slightly.

That's the same sentiment I share along with other brokers in the area. Downtown & Brickell are overbuilt and the luxury market ($1ML+) will definitely have its issues.

$100k-$500k is doing excellent and should continue to fare well. $500k for a beachfront condo to someone in NYC or CALI is nothing. There is just a lot of inventory in those areas due to foreign sellers needing their money because of issues back home or other reasons.

There is a single-family home shortage right now with listings in the greater Miami area, especially in the sub-$300k range. If its move in ready and a decent neighborhood, its being snapped up quickly and sometimes for over asking price by 1st time buyers.

Job market has improved in Miami and more jobs are coming down the pipeline. Plus Millennials are leaving their city pads now that they are (slowly) getting married and having kids.

The $500k-$900k is just so-so in some parts, especially condos. For homes in that range in the Gables/Grove/Miami Shores areas, they are still selling quickly.
Plus interest rates dropped again recently so you can still get a 4.0% rate with good credit. Despite the recent raise by the FED, it hasn't affected the market yet, but after 2-3 more increases (That they plan), it will affect 'how much house' a new buyer or 'move-up' buyer can purchase.

The popular areas of Miami are still predominantly rental areas so investors are still getting good returns on their purchases from 2011-2013. Some are cashing out and doubling/tripling their money and others are still riding it out. If You own a condo in Downtown, its almost too late to sell unless you want to take less than what you would have got in 2015. Otherwise, wait until Paramount/New Convention Center/Movie Theatre/New Rail stop, etc. are built and then sell.

If you're well qualified and looking for a condo in various beach areas or downtown/brickell, its a buyers market. If you're looking for a $250k-$400k home in a good part of Miami, its a seller's market. (currently)

[AnnRyan]

Originally Posted by Marc Middleton

That's the same sentiment I share along with other brokers in the area. Downtown & Brickell are overbuilt and the luxury market ($1ML+) will definitely have its issues.

$100k-$500k is doing excellent and should continue to fare well. $500k for a beachfront condo to someone in NYC or CALI is nothing. There is just a lot of inventory in those areas due to foreign sellers needing their money because of issues back home or other reasons.

There is a single-family home shortage right now with listings in the greater Miami area, especially in the sub-$300k range. If its move in ready and a decent neighborhood, its being snapped up quickly and sometimes for over asking price by 1st time buyers.

Job market has improved in Miami and more jobs are coming down the pipeline. Plus Millennials are leaving their city pads now that they are (slowly) getting married and having kids.

The $500k-$900k is just so-so in some parts, especially condos. For homes in that range in the Gables/Grove/Miami Shores areas, they are still selling quickly.
Plus interest rates dropped again recently so you can still get a 4.0% rate with good credit. Despite the recent raise by the FED, it hasn't affected the market yet, but after 2-3 more increases (That they plan), it will affect 'how much house' a new buyer or 'move-up' buyer can purchase.

The popular areas of Miami are still predominantly rental areas so investors are still getting good returns on their purchases from 2011-2013. Some are cashing out and doubling/tripling their money and others are still riding it out. If You own a condo in Downtown, its almost too late to sell unless you want to take less than what you would have got in 2015. Otherwise, wait until Paramount/New Convention Center/Movie Theatre/New Rail stop, etc. are built and then sell.

If you're well qualified and looking for a condo in various beach areas or downtown/brickell, its a buyers market. If you're looking for a $250k-$400k home in a good part of Miami, its a seller's market. (currently)

I would agree. Anything affordable I've listed recently has gotten multiple offers (and most have sold over list price). The luxury listings... well they sit on the market. Most will eventually get an offer or two, but it depends on whether the seller is actually motivated or not to negotiate.

[MadManofBethesda]

Originally Posted by elchevere

Nothing goes up forever..trust me, California and NYC which have had more real estate booms than Florida, correct.

No need to trust you; that's common sense.

Originally Posted by elchevere

I am not expecting a crash but I do not believe a 10-20% correction is far fetched...

No, it's not.

Originally Posted by elchevere

every time I hear "this time it's different" (real estate, stock market, etc) it is not.

No need to put up a straw man to knock down. No one is saying "this time it's different."

Originally Posted by elchevere

If you plan on living in and/or holding on to your current property 5, 10, etc more years you should have nothing to worry about.

Exactly. So why tell people to wait up to 18 months before buying on the chance - - - on the chance - - - that there might be a routine correction in the interim? As I noted in my earlier post, some have been warning about a correction for 5 years. Even when one eventually comes, the people who have waited all these years to buy will still be behind where they would have been had they just purchased when they wanted to rather than waiting for the correction to arrive.

[elchevere]

^ ^ ^

If you expect the market to drop 10-20%, as I do, why the hurry?--unless you find the turnkey unit of your dreams at this point in time that you don't think will be available in another 4, 6, 8 or 14 months...Me--I am betting on the market coming to me (rate hikes, Zika scare in some minds, fewer LATAM buyers, excess inventory, etc) and am not alone in my thinking.

I figure the eventual price drop will cover my rental outlay while I wait for the right unit at right time. Given the current multi-year condo inventory supply on market with many additional new units to follow, patience is the key. I held out for my asking price, rejecting lowball offers, that I ultimately got on my San Diego condo and plan on exercising the same discipline in buying a Miami condo. Right now, there are not units available at a price I feel like paying (or, overpaying); hence, the patience, and a desire to avoid catching a falling knife. I put the risk of this market turning on a dime and my missing out on a good buying opportunity as a result of waiting as low.

I do agree that pricing depends upon IF the seller is motivated...at a building I am focused on, some sellers of units in a line I am looking at are asking ridiculous, 15-20% above market comp pricing. Their units are rented right now, which probably means they have their monthly nut covered and are hoping to find someone willing to overpay and are not motivated sellers.

The story that the OP linked seemed focused, if not exclusively, on the condo market (and luxury ones at that). That is what I was responding to, FWIW.

[logybogy]

There is literally negative domestic demand for Miami, either to live in or work. Population figures year after year show continuing domestic migration out and white flight out either with the oldsters dying or the holdouts retiring cashing out their homes and moving to Central/North Florida or out of state.

White population in Miami-Dade is 13% and dropping. The place to be now for people with money from the Northeast is Palm Beach/Sarasota/Naples/Flagler Beach/The Villages. The only thing keeping the Miami-Dade population growing is extreme immigration and foreign investment AKA money laundering from South America. And this is GETTING MUCH MORE DIFFICULT SINCE LAST YEAR.

https://www.nytimes.com/2016/01/14/u...tate.html?_r=0