According to a recent report from Sunny Realty, the Miami area has experienced the largest boost in sales activity in five years. The largest contributing factor to this rise in activity is the number of foreign buyers flooding to the area, predominantly from European countries and Brazil.
“The 2011 trend shows that we are heading toward a healthier Miami real estate market. The strength of this market is something that hasn’t been seen in years, showing promise for a strong third and fourth quarter finish,” stated Leon Bell of Miami’s Sunny Realty.
When evaluating reports on the state of the Miami real estate market, it is essential to consider specific segments of the data collection relative to the types of properties listed, those selling, those in distress and who the buyers are. For example, at first glance at recent pricing reports, one would conclude that the median sales price for Miami properties had dropped. June reports show the median pricing of single-family homes in Miami dropping slightly, 2.8%, from second quarter close. One contributing factor to this slight price decrease is the number of distressed property sales in the area.
Many real estate professionals, including those of Sunny Realty, suggest that we are nearing the bottom of the distressed inventory, as many property owners have addressed these issues over the past several years. What we will be left with moving forward are the more desirable properties, positioned well to sell. In fact, as the number of distressed properties has been drastically reduced in recent months, the number of properties currently in inventory has also dropped, helping prices to hold their own, despite the perception of a slow market.
While this tells the tale of the median home market, an entirely different story is painted when you consider the state of the Miami luxury real estate market.
When you isolate luxury properties in the same area boasting average pricing in excess of $1 million, up nearly 5% from second quarter, a different story is painted of the market. Leading the market are luxury properties, predominantly of interest to foreign buyers (nearly 80% of sales), although domestic buyers are also looking to the area for vacation properties offered at competitive prices. Within the Miami area, homes in Miami Beach are showing the most promise, case in point with the recent $19.8 million sale of the Maurice-Fatio designed property on Sunset Island.
As the number of high end Miami homes sold increases over the past month, the number of high end properties hitting the available inventory has not. This trend suggests that the market is tightening. It is possible that the Miami real estate market will bear price increases as we head into the year’s end.