Even with a record number of Florida foreclosures and numerous public auctions of unwanted homes, the upper tier of Miami real estate properties in Florida remains relatively untouched amidst the recent real estate slump.
Miami homes and Miami condos priced at a million dollars or more are still selling in some of the most exclusive areas, just not as rapidly as a year ago. The magnificent Miami Beach oceanfront homes, the sprawling estates of Palm Beach and the majestic mansions in Naples are still attracting both domestic and foreign buyers.
The South Florida real estate market seems to be divided in to two tiers; the lower tier with vacant houses and partially completed developments and homeowners struggling to meet their monthly payments as rates adjust upward. The luxury end has its unsold new condos and mansions’ lingering on the market, too, but like New York, where the asking prices in Manhattan are high the market is still strong and sales have fallen less. In South Florida luxury Miami homes are continuing to attract the interest of wealthy buyers.
Because of the weak dollar both markets have been targeted by foreigners as the best location to buy American homes at a bargain. South Florida real estate has added demand from wealthy retirees across the country and second-home buyers, particularly from the Northeast.
Communities that have global appeal such as the Bay Area, Los Angeles, Manhattan and Miami have held up much better than the rest of the housing market. Because much of their buying is done with cash a recession or global financial turmoil would not have too much impact on these areas.
Home prices have fallen 7.3 % in the greater Miami area from their peak in December 2006. The median price for Miami condos that sold for over $1 million is holding steady at $1.5 million, according to the Realtor Association of Greater Miami and the Beaches because of a shift upward in the value of the homes that have been resold. The median price for single-family homes was reported to be up slightly by 3.4% from $1.46 million to $1.51 million in the 2006 period.
The South Florida real estate market as a whole has taken a huge hit this year, based on the number of sales. Unit sales of Miami homes and Miami condos worth less than $1 million, for example, fell 37.2 % through October 23rd compared to a year earlier. So far in 2007, 7,078 homes have been sold.
Even high end Miami real estate is cooling off. The number of Miami condos and Miami single-family homes that sold for more than $1 million fell 18% from 958 units through October 23rd compared to 1,166 units sold in the same period a year earlier.
On Florida’s west coast in Naples, the very high end of the market, there have been about 40 sales so far this year, compared with 46 sales for all of 2006.
The number of units sold in Palm Beach has fallen 15% to 223 properties.
The market has held up mainly because of the eager foreigners who are still showing up and often paying cash. The number of foreign buyers in Florida has dropped considerably since 2005 according to a survey done last year by the National Association of Realtors. The survey also found that 29% of those buyers paid cash and only 8% of domestic purchasers did and more than 10% of the foreigners bought homes for over $1 million.
Contributed by Miami Luxury Villas
