When most people buy real estate, they aren’t just buying a place to call home, even though that might be their primary goal. They are also buying an investment. Even if they don’t plan to rent out the place and use it as an investment property, they do want the home to go up in value. This way, they can sell the home later and hopefully make a profit. The amount of money that you can expect the home value to increase by varies based on a number of factors. However, it’s quite rare that you can expect the home to quadruple in value, especially in a short time.
Jorge Perez is hoping that his efforts to sell his penthouse, located at One Ocean – see website here will pan out though. When he bought the home in May of 2016, he paid $4,233,600 for the property. At that time, the price was $1,200 per square foot. Little more than a month later, Perez decided that he would sell the home, Unit 706, and he was asking more than the purchase price. He wasn’t only asking for a little bit more money though, as one might expect from a house flip. Instead, he was asking for $20 million for the home in the South of Fifth neighborhood. This equates to $5,669 per square foot.
Is It Worth the Price?
The unit is on the top floor, and it features a beautiful wraparound terrace that offers a view of the pool. By all accounts, it is a lovely condominium, but most real estate professionals in the area do not believe that it is in line with the market. On the MLS, two penthouses that were on the same floor as Unit 706 sold for much less. Unit 701, which offers 3,534 square feet, sold for $7.072 million. Unit 707, which has $3,206 square feet sold for $6.412 million.
As you know, the market demand will dictate the price of real estate in many cases. With Jorge Perez’s unit, the asking price seems very out of line when compared with the other prices for units in the building. While it is certainly possible for Perez to make a nice profit with the unit, getting that $20 million asking price might not be possible.
That’s not to say that homes in Miami don’t go for astronomical prices sometimes because they certainly do. At Faena House a property is selling for $18 million, and another one, owned by Ken Griffin, is selling for $55 million. It is possible to sell homes for a large sum of money. However, the experts are quick to point out that those other two sales are happening at Faena House, which is at the top end of the market.
It’s unclear whether Perez will be able to find someone who will buy the unit at the price, or if he will end up having to lower it. Since there are so many other comparable units in the building and the area, which cost far less, it is likely going to be very difficult to sell it for so much. Only time will tell.