Steaming Hot: Luxury Home Sales in South Florida
Since late last year, residential properties in South Florida ranging from $1 million plus to over $15 million have been selling at incredible pace. Single family sales doubled, with average sales prices increasing 20.1% from $2.55 million to $3.06 million, with all cash deals more than doubling. While high-end condo market sales are arguably outpacing single family home, the overall supply for high end properties has been selling so quickly that buyers are placing deposits on luxury properties that have yet to be built at a pace not seen in a long time.
How did this happen?
There are many reasons as to why the South Florida luxury market is booming. One major reason is that people from other states, such as California and New York, have fled to South Florida to avoid higher taxes. For those in the Northeast or Midwest, our weather is another factor luring home buyers to South Florida. Further, many out of state purchasers believe that Florida is more business friendly as many businesses were allowed to remain open during the pandemic. Another reason is that interest rates are still at an all- time low, providing homebuyers in general the ability and flexibility to purchase. Additionally, the luxury market is booming due to a strong stock market which has created tremendous liquidity.
The pandemic has also contributed to the luxury housing craze, as more luxury homebuyers seek larger homes and outdoor space, and incorporate work for home offices as well as family leisure. This is especially the case for people who are able to continue to work remotely as the reality is that they can work from anywhere.
How long will this last?
Without more inventory in the luxury market, demand will continue. However, with more COVID-19 vaccines available and sellers becoming more comfortable with placing their homes on the market, more homes may become available to meet, in part, this demand. Some economists, like George Ratiu of realtor.com, sees a tight supply running into 2022 as buyers use real estate as a hedge against a potential rise in inflation and home builders try to close a US home shortage that has been unable to keep pace with demand over the last decade.
Should you need assistance with a residential real estate purchase or sale, our title company, Weston Title & Escrow, Inc. is able to help you at 954-384-6168. Should you have a legal question about a potential purchase or sale, our team at Oppenheim Law is here to help you at 954-384-6114.
From the Trenches