By Sunny Isles Real Estate Expert on March 31st, 2013
Recent changes in the South Florida real estate market
have led to surprising doors being opened for high end real estate developers. A few years ago, a housing market downturn caused detrimental changes for developers. No one was buying and no bank was willing to finance. Together, this meant that high end properties were left unsold. However, things have changed and this can best be seen through projects of developers like Oren Alexander.
This developer recently put together a deal that would have been unheard of just two years ago. They sold the 3 Indian Creek property in Miami for $50 million in cash. This sale was for a 30,000 square foot mansion that was actually built by patriarch, Shlomi Alexander. No one expected the housing market to take an upswing that would lead to new sales of high end properties, but in the last year, that happened.
After the sale of 3 Indian Creek, Alexander saw options in that more buyers are interested in exclusive properties in South Florida. A new project for a house described as “island colonial” is now in the works, and it is expected to sell for around $30 million. The hefty price tag is still considered appealing because the 11,000 square foot home is located right on the beach.
Why Are People Buying Luxury Miami Beach Homes
$30 million seems like a lot of money, especially in light of the real estate crash, but buyers have changed. In fact, the buyers interested in these types of properties are purchasing their third, fourth, or even fifth homes. This type of money isn’t as much of an issue. For a while, they didn’t buy because the market was so slow. However, with the new upswing, the luxury buyers are back on the market.
In fact, developers, like Alexander, realize the buyers are now out there, and instead of putting their mansion-like homes on the general market, they shop them exclusively to specific buyers. This makes the properties even more exclusive.
It may come as a surprise, but according to the CEO of Sotheby’s, almost half a dozen properties in Miami-Dade closed for more than $19.5 million each in 2012 alone. In 2011, there were only two sales of this caliber. This makes it all the more obvious that buyers are actively searching for new luxury homes as the real estate market takes a swing upwards.
What Miami Beach Realtors Notice
The realtors are also noticing this change. For example, Alex Rodriguez of the New York Yankees recently put his home up for sale at around $38 million. While he ended up renting out the property, numerous people came for viewings while it was for sale. This indicates that people consider these higher price tags reasonable.
Just a few years ago, luxury homes were not selling. No one was willing to take a risk. However, things have changed, and experts think that soon, properties will be selling for more than $3,000 a square foot in the Miami area. This spurs developers forward with new projects.