The South Florida real estate market overcame nearly a month of stalled activity in the wake of Hurricane Irma, a sign of the market’s resilience moving into 2018, according to a joint report from ONE Sotheby’s International Realty and Integra Realty Resources.
The hurricane, which ripped through Florida in early September and left a trail of flooding and power outages in its wake, was expected to hit total transactions in the area by as much as 8% (or around one-twelfth of the year), said Daniel de la Vega, president and managing partner of ONE Sotheby’s in an interview Monday. But the year ended with sales volume up and a few key areas attracting headline-making sales.
The report, which comes out at the end of the month, takes a deep dive into South Florida’s luxury performance—defined at the top 50% of the market—in 2017 and predicts moderate growth in 2018, aided by the income tax overhaul and a weakening dollar.
“Overall, 2017 was a very strong year—much stronger than what the experts predicted,” Mr. de la Vega said. Before Irma, grim predictions also centered around President Donald Trump having a cooling effect on international demand, particularly among South Americans, in Miami and neighboring counties.
Exclusive Palm Beach and the gated golf communities of Broward County attracted a broad pool of very deep-pocketed buyers in 2017. Major transactions included hedge funder Ken Griffin picking up four acres in Palm Beach for $85 million.
In Palm Beach, sales of homes priced between $1 million and $5 million increased 5% in 2017, while sales rose 28% for homes priced between $5 million and $10 million. Sales are expected to grow a modest 1% to 3% in 2018, according to the report.
Meanwhile, Miami-Dade County continued to attract the bulk of South Florida’s international buyers.
Miami Beach logged multiple $20 million-plus sales, helping the total average sales price for single-family waterfront home jump 45% in 2017, according to the report.
Miami’s island communities—such as Key Biscayne and Venetian Islands—also saw strong price growth in 2017. Luxury average prices among Miami’s islands jumped 41%.
Meanwhile, the condo market in South Florida continued its contraction in 2017 due to an oversupply of resale units. Sales for non-waterfront condos declined 3%, while waterfront sales and average prices slipped about 2%, according to the report.
Softness in the condo segment has discouraged new development over the past couple of years. Even still, 2018 may see a few new luxury project announcements, as developers hope a weakening dollar might attract more international buyers to projects three to four years down the line, said Anthony Graziano, senior managing partner at Integra Realty Resources.
“International inflow will come back this year and next,” he predicted.
Other macro-economic trends are likely—or have already started—to benefit South Florida, he said.
Florida’s zero state income tax is drawing a widening pool of self-employed buyers, snowbirds and semi-retirees as the tax overhaul hits high-tax states like Connecticut, New Jersey and New York, he said.
From an investment perspective, Florida “is still a very safe place to be,” he said.
Follow Mansion Global:Facebook | Twitter | Instagram | LinkedIn | Messenger
Write to us: email@example.com