Homes & Estates Florida Collection May 2017 | Page 7

MARKET WATCH:
FLORIDA LUXURY REAL ESTATE
The case for acquiring luxury real estate in Florida has always been a compelling one. At its core, Florida will always be one of America’s most sought-after
paradises — beloved by affl uent snowbirds from Canada to Ohio, revered by South Americans and Eastern Europeans who want a safe haven for their wealth, and
prized by developers eager to capitalize on potential profi ts with upscale new construction projects. These forces have aligned to mixed effect in many regions
across the Sunshine State. For that reason, “fl uid,” “improving” and “active” are three key words used to describe luxury market conditions around the state when
we asked fi ve key executives from Coldwell Banker Residential Real Estate in Florida to weigh in on the current state of the high-end. With hopeful anticipation,
they underscored a trend toward movement and fl uidity in the upper price echelons.
SOUTHEAST FLORIDA
Duff Rubin
Regional Senior Vice
President, Southeast Florida,
Coldwell Banker
Residential Real Estate
Duff Rubin, regional senior vice president of the
Southeast Florida region at Coldwell Banker
Residential Real Estate, characterizes the current
luxury real estate market as “fl uid.” He presently
oversees over 20 locations throughout Miami-
Dade, Broward and Palm Beach counties. A
surplus of luxury high-rises, brought on by a
heated new home construction market, has begun
to put downward pressure on prices in some of
this region’s most sought-after destinations,
including Miami and Fort Lauderdale.
“There has been a signifi cant change in the last
year as prices settled after a rapid increase over
the last three to four years,” says Rubin.
Current State of the Market: From 2015 to 2016, there was an increase of
14.6% in available luxury housing inventory for all three counties. Sold properties
decreased 12% year to year. Fewer property sales also meant homes stayed on
the market longer in 2016. There was a 32 months’ supply of homes for sale in
the $1 million and up price-point. Still, Rubin views Southeast Florida as a good
market to trade in “because the properties are selling at a fair market price, and
there is not a lot of change in the market if the seller decides to purchase after
the sale,” he notes.
International Infl uence: Cities like Miami and Coral Gables, which saw large
infl uxes of affl uent purchasers coming from South America and Europe, notably
Brazil and Russia, have been impacted by a recent and signifi cant drop in these
buyers. Brazil is in the midst of a historic recession. Meanwhile, visa concerns
continue to slow Russian affl uent buyers. Additionally, the election has put many
international buyers on pause as they wait and see how the new administration
handles foreign policy with their countries. Despite these factors, Rubin remains
buoyant about Miami’s real estate market. “It is the gateway to all international
markets, and the area is very friendly for visitors and residents from all over the
world. Since the United States is considered safe for the ownership of property,
and a safe harbor for money and physical safety, it remains attractive for investors,
second-home buyers and residents from all over the world.”
Wild Card: Rapid construction of new condos continues to have a large impact
on the Southeast Florida market. Since 2010, there have been over 20,000
condos built or under construction in Palm Beach, Broward and Miami-Dade
counties; 11,000 condos are approved and pre-selling, and 19,000 condos are
in the pipeline, not yet approved. Greater Downtown Miami is the epicenter of the
condo construction boom, with 42% of the share of all South Florida condo units.
Incidentally, some of Miami’s highest sales in the past year have been condos —
including a $21.5 million penthouse on Fisher Island Drive and a $15 million condo
at The Continuum.
Hot Markets: In Miami, the sought-after enclaves of Key Biscayne, Pinetree
Drive and several penthouses along Miami Beach posted record sales last year.
“Fort Lauderdale is still less expensive than Miami,” says Rubin, “But the gap has
decreased as the airport expands and people are looking for less traffi c.”
Good Buys: “Miami’s Bay Harbor Islands are getting a lot of attention, and
Surfside is growing and has attracted the attention of developers,” says Rubin.
“Many investors are buying properties specifi cally to hold on to for possible tear-
downs and building new construction.”
Outlook: “The market should be relatively stable, and the supply of condos
should absorb in the next fi ve years as the products are fi nished,” concludes
Rubin. “Miami is always healthy and recovers well from any change in the market,
primarily due to the ample supply of beaches, shopping and cultural events – not
to mention that sunny Florida has no state income tax.”
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