Miami Beaches Market Activity Summary for January 2015 through May 2015
While working with my residential customers over the past few months, I noticed something quite alarming about the real estate market on Miami Beach. Transaction volume (the number of homes sales closed), when compared to last year, is down by as much as 50% when looking at Market Reports for each of the Miami Beach zip codes.
Starting from the legendary South Beach and working north to Sunny Isles and Golden Beach, the data is as follows:
33139 – South Beach – Median Est. Home Value $390K Up 13%; Median Est. Listing Price $217K Down –17%; Median Days in RPR 97 Down –7.6% Sales Volume 109 Down –46.8% !!!!
Given that transaction volume is off by nearly 50%, local Realtors in 33139 must be hurting. My firm alone closed 4 (soon 5) of those 109 transactions so far this year.
33140 – North Beach – Median Est. Home Value $473K Up 5.1%; Median Est. Listing Price $345K Down –6.8%; Median Days in RPR 106 Up 1%; Sales Volume 60 Down –29.4%
33141 – Surfside & Bay Harbor Islands – Median Est. Home Value $261K Up 6.7% Median Est. Listing Price $175K Down –23.7% Median Days in RPR 87 Down –13.9% Sales Volume 80 Down –37.5%
33154 – Bal Harbour – Median Est. Home Value $580K Up 9.2% Median Est. Listing Price $395K Down –2.5% Median Days in RPR 102 Down –20.3% Sales Volume 43 Down –36.8%
33160 – Sunny Isles Beach & Golden Beach – Median Est. Home Value $349K Up 9.9% Median Est. Listing Price $225K Down –10% Median Days in RPR 98 Down –11.7% Sales Volume 98 Down –49%
In every case, we have home values going up while listing prices are coming down and transaction volume is off by as much as 50% year over year! This makes me beg the question, have prices gone too far, too fast? Are we finally at a tipping point where Sellers will begin to come back to Earth with more realistic ideas of their home’s value? I hope so.
I believe there are a number of factors in play that have led to this tragic decline in sales volume:
1) The Russian Ruble has lost more than a third of it’s value over the past 12 months and Putin has put capital flight controls into place making it very difficult for Russian Citizens to transfer money out of country. Further, what money can be transferred out, is now worth significantly less against the dollar. This is greatly dampened investment out of Russia over the past 6 months as well as the spirits of an innumerable number of Realtors.
2) The world is sliding back into a global recession; some argue that we never actually got out of it in the first place. Whatever the case, governments in Europe and South America have been making it either more difficult, if not impossible, for their citizenry to take their money overseas. To make matters worse, our own government levies taxes on Foreign Direct Investment and given that at least 5-10% of all jobs in South Florida are created by foreign businesses opening their doors here, one would question the sanity of our politicians in not making it easier and less expensive to invest here!
3) With all the new construction is not unimaginable that at least some number of prospective Buyers have decided to buy pre-construction & new construction deals. These numbers would not flow into the reports as these properties were never listed.
4) “Prices have genuinely gone too far” seems to be the most logical conclusion! Limited supply of great location real estate and large demand originating from the “steals” of 2009 to 2012 (mortgage crisis) drove prices for the past several years. As prices have gone up, however, the pool of available Buyers has shrunk; and those who would have been in the market for a Miami Beach property have either given up, or have turned their eyes to the north such as Hollywood Beach, Fort Lauderdale, Pompano Beach and Deerfield Beach.
For the sake of brevity, I have concluded here. There are other factors for sure, but I believe I captured the majority of the macroeconomic factors. I am very interested in any reasonable, rational comments, contributions, & critiques.
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