Affordable luxury homes continue to dominate the market in South Florida, with less expensive areas inland and north of Miami seeing strong activity, according to a report Thursday from Douglas Elliman.
On the coastal mainland communities of Miami, where top-tier homes are considerably less expensive than on the hot barrier island of Miami Beach, the median sales price for a single-family home has increased 20% in the second quarter from a year ago to $1.5 million, according to the report prepared by property appraisers Miller Samuel, which defines luxury as the top 10% of the sales.
It’s a different tale on Miami Beach and barrier islands, where luxury homes are on the market for as high as $65 million. The median price there has declined precipitously over the past year as buyers and developers lean toward smaller and less expensive units. The median price of a luxury condo on Miami Beach fell to $2.283 million, a nearly 20% drop from a year ago—though the number of luxury sales are as strong as they were then.
“The market still remains softest at the top,” said Jonathan Miller, chief executive of Miller Samuel and author of the report. “Most of the luxury numbers that show a decline in terms of the pricing are because the average sales size has dipped.”
Miami Beach condos spending more time on the market
Fears of overdevelopment have plagued the very top of the Miami market over the past year, and the second quarter showed evidence of that softness. The average luxury condo in Miami Beach spent 2.5 more months on the market than a year ago. Single-family luxury homes have gone from only 75 days on the market on average in the second quarter of last year to nearly 10 months.
Sellers on Miami Beach are also leaning on big price concessions, though slightly less dramatic than a year ago. Single-family homes took an average price cut of 14.5%, while condos took an 11.4% discount.
In some cases, developers have responded to the shift toward more affordable luxury by downsizing units, Mr. Miller said.
“Developers do a better job at scrambling, shifting mid-construction to a smaller unit mix,” he said.
North of Miami
The tale of affordable luxury continues north of Miami in generally less expensive markets like Fort Lauderdale, Boca Raton and Delray Beach.
The median price for a high-end condo in Fort Lauderdale has increased to $1.176 million, up 17.3% from a year ago, as snowbirds are attracted to the more affordable beach city. There’s been an uptick in overall transactions for luxury condos in Fort Lauderdale, according to the report. The median price for a posh single-family home in Fort Lauderdale was consistent with last year, at around $1.7 million.
The one exception to the cheaper luxury tale is Palm Beach, where the median sales price surged more than 50% over the past year to a staggering $15.8 million in the second quarter. That was based on only 14 sales on the ultra-luxe barrier island, where inventory is tighter than it’s been in a year.
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