South Florida logged robust home sales, especially among luxury condos, in the second quarter of 2018, according to reports Thursday from Douglas Elliman.
Palm Beach saw the greatest number of sales in a single quarter in three years, with 160 homes changing hands on the exclusive island north of Miami. Luxury condo sales in Miami Beach and the barrier islands increased more than 13% compared to this time last year, while luxury condo sales and prices soared in Fort Lauderdale, according to market reports prepared for the brokerage by appraisal firm Miller Samuel.
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"We’re seeing overall and consistently strong gains in each of our markets," said Jay Parker, Douglas Elliman’s chief executive officer for Florida. He attributed some of the boost in South Florida to snowbirds leaving high-tax states like New York and Connecticut for good in response to the federal tax overhaul that Congress passed in December.
The luxury condo market, a recent sore spot in South Florida due to overdevelopment in places like Miami Beach and the Miami mainland, saw strong sales activity and price increases.
Luxury condo inventory in Miami Beach and the barrier islands fell 20% from a year ago. It’s a positive sign that new development, which wound down in 2016 amid tough market conditions, will likely pick up again soon.
The median sales price for a luxury condo in Miami Beach soared to $3.37 million in the second quarter, up 47.6% from $2.28 million last year. Luxury single-family homes on Miami Beach hit $10.76 million in the second quarter, up 34% from $8 million last year.
In mainland Miami, the median price for luxury condos rose 6% year-over-year to nearly $815,000.
Fort Lauderdale’s luxury condo market is moving twice as fast as it was a year ago. And high-end condo markets heated up in Delray and in Palm Beach, which by the end of June had only six months of condo inventory, according to the report.
The strength in areas north of Miami underscores a shift in buying patterns, Mr. Parker said.
"The historical focus of the second home buyer was Miami, Miami Beach. While that market hasn’t experienced any pain as a result of the shift to the north, buyers from other markets are recognizing the value opportunities in Broward County and elsewhere in South Florida," Mr. Parker said.
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Absorption rate, a measure of the strength and speed of a market derived from inventory and the number of sales, improved significantly in Miami Beach and Miami mainland, two places that still have an oversupply of condos.
By the end of June, Miami Beach had 31 months’ worth of luxury condos on the market, down from 44 months a year ago. "The pace of the market feels faster, it’s not fast but it’s faster," said Jonathan Miller, president of Miller Samuel and author of the report for Douglas Elliman.
The second quarter also marked a jump in the size of units trading hands, Mr. Miller said—a sign that big spenders are back in play and looking for more lavish homes.