Luxury condos in Miami Beach saw some minor corrections in the third quarter of this year, with the median sales price declining 4.5% year-over-year, according to a report released Thursday.
Other key metrics in the same study showed the overall market in the area rebounding to a normal level.
In the third quarter, the median sales price of luxury condominiums in Miami Beach/Barrier Islands—which is defined as the upper 10% sales of the market—dropped to $2.1 million from $2.2 million in the same period last year, according to the quarterly market report compiled by Miller Samuel Inc., a real estate appraisal and consulting firm, on behalf of Douglas Elliman Real Estate.
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"The market is resetting from what I called a historical abnormality during 2012 to 2015," said Jonathan Miller, president and CEO of Miller Samuel. "It is gradually shifting away from the tremendous emphasis on the high-end market."
Following a pattern observed across the board in hot markets in the U.S., the Miami Beach market remained soft on the top and tightened as the price level moved down, Mr. Miller noted. The overall median sales price was down to $383,750 from $403,500 , representing a 4.9% decline.
Sellers Capitalized Gains by Making Price Adjustments
In the third quarter, there were 1,235 active listings of luxury condos, which most development activities focused on in the past few years. This figure represented a 30.1% increase from the third quarter last year. Listings on average stayed 126 days on the market, more than doubling the 57-day average in the third quarter of 2015, while the listing price discount was up to 8.9% from 2.7% in the same period.
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"Due to their perception of market volatility, sellers are willing to make price adjustments to realize their gains," said Jay Parker, CEO of Douglas Elliman’s Florida brokerage. "Overall, the price drop is not an alarming concern, and the inventory is healthy, appropriate and digestible."
As currencies stabilized in many countries, interest from European and Latin American buyers is reviving, Mr. Parker added. In addition, he expects some domestic buyers will also look into Miami Beach again once the cold weather hit the northeast.
One-Bedroom Condos and Five-BedroomSingle-Family Homes in Greater Demand
Meanwhile, the median sales price of luxury single-family homes declined to $8.4 million from $8.6 million, down 2.3%, and showed more resilience than the condo market. There were 144 homes listed on the market from July to September, 22% more than the third quarter of 2015.
However, in terms of the overall market, one-bedroom condos and five-bedroom single-family homes fared best, both seeing increases in price and gains in market share (see the table below), according to the report.
Write to Fang Block at fang.block@dowjones.com