Welcome to another edition of the Miami Beaches Market Pulse! This article covers August 2016 versus August 2015. The Miami Beach Real Estate Markets have now been in a correction for at least 18 months and an equilibrium has not yet been established. Listing Volumes are at or near 3 year highs and Sales Volumes (in so far as MLS is concerned) have been seeing a 2nd year of substantial declines.
Market Activity & Neighborhood Reports by Zip Code for the Miami Beaches
33139 – South Beach
Median Est. Home Value: $392K, Down -1.3%; Median Est. Listing Price: $272K, Up 8.1%; Median Days in RPR: 130 Up 5.7%; Sales Volume: 44, Down –68.3%
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MLS Sales Volume is at a 3 year low. Listing Volume is near a 3 year high.
Estimated Home Values have begun to correct; as I have indicated earlier, the values have been increasing despite the correction beginning more than 1 year ago. Median Listing Price has been up, but there are a large number of new and renovated units hitting the market, listing volume remains near a 3 year high, and in kind, transaction volume has plummeted. In the basic course of economics, prices must go down for equilibrium to be established. Transaction Volume will continue to fall barring more macro-economic considerations, such as a substantial fall in the Dollar, which would bring in another round of Foreign Direct Investment.
33140 – Mid-Beach
Median Est. Home Value: $527K, Up 7.9%; Median Est. Listing Price: $475K, Up 20.3%; Median Days in RPR: 128, Up 1.6%; Sales Volume: 60, Down –34.1%
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MLS Sales Volume has ticked up and is approaching it’s 3 year average. Listing Volume remains at a 3 year high.
This year in 33140, half of all transactions were over 600K! Mid-Beach appears to have rebounded to a degree off of it’s lows. It is still too early to tell if this is merely a bounce, or a greater change in trend. Of note though, nearly 50% of all units sold were between 50-60 years old, which can possibly be attributed to entire building(s) being taken over by developers. Despite the activity of the year, sales volume is still off by 34% August 2016 versus August 2015.
33141 – North Beach & North Bay Village
Median Est. Home Value: $266K, Down 0.5%; Median Est. Listing Price: $276K, Up 20%; Median Days in RPR: 116, Up 6.4%; Sales Volume: 23, Down –75%
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MLS Sales Volume is at a 3 year low, possibly an all-time low. Listing Volume is at a 3 year high.
North Beach & North Beach Village continues to be the laggard among the 5 zip codes of the Miami Beaches; and in my opinion, this makes it a great buy and is very likely going to see the greatest improvement in the next real estate boom. Nearly half of all transactions in the past year have been in the 200-300K range, making it by far the most accessible location from a financial perspective for the average income. Given it’s extraordinary location and ongoing development, I think, of all the zip codes, this is the place to find opportunities and Buy, Buy, Buy!
Furthermore, this area is displaying great chart & number characteristics pertinent to the subject of economics. As listing volume remains flat at a 3-year high and sales volume plummets, the median listing price has finally begun to correct in kind. I expect this trend to continue, minimally, perhaps bottoming out between 225K and 250K, telling me that we are at or near a Buy point.
33154 – Bal Harbour & Bay Harbor Islands
Median Est. Home Value: $682K, Up 8.4%; Median Est. Listing Price: $535K, Up 27.5%; Median Days in RPR: 130, Down –3.7%; Sales Volume: 12, Down –70.7%
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MLS Sales Volume is at a 3 year low, possibly near an all-time low. Listing Volume is at a 3 year high.
The vast majority of sales over the past year have been under 600K. However, Bal Harbour and Bay Harbor Islands have seen substantial sales in pre-construction & new construction as it is one of the wealthiest zip codes in the United States and therefore is one of the most desirable places to live. Median listing price corrected from near 600K to 525K over the past 3 months and while we continue to be in a market correction, Bal Harbour & the Bay Harbor Islands will weather the storm far better than any of the other zip codes of the Miami Beaches. They are few and far between in this area, but focus on distressed asset purchases in this area if you are looking to build in some cushion to your investment. Now is definitely not a market where you should feel incentivized to over pay.
33160 – Sunny Isles Beach, Eastern Shores & Golden Beach
Median Est. Home Value: $360K, Up 1.1%; Median Est. Listing Price: $330K, Up 31.5%; Median Days in RPR: 144, Up –15.2%; Sales Volume: 26, Down –84.1%
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MLS Sales Volume is at a 3 year low. Listing Volume is at a 3 year high.
There is a great deal of uncertainty in both the microeconomic and macroeconomic environment due to the forthcoming Presidential Election, and, people are beginning to wake up to the fact that the past 8 years of fiscal & monetary policies have created yet another asset bubble. We stand between a couple of very likely alternatives, as the Federal Reserve is basically out of bullets. There are three possibilities – either we will see massive inflation/hyperinflation, deflation on a scale that is unprecedented, or a volatile mix of both. Keep in mind that the Miami Beaches are amongst the MOST desirable places in the world to live; so even if the Dollar tanks/is-devalued, we have the privy of very probably influx of Foreign Direct Investment; and this could cushion if not buoy the local beach markets.
As I indicated in my prior article, if you were planning to sell within the next 3 years; Sell Now! You, the Owner/Seller, have control of the contract you sign with your Broker. Keep the term short (3-6 months) and ensure you can withdraw the listing with minimal notice (2 weeks to 1 month). Be sure to get 2nd and even 3rd opinions from reputable Brokers regarding your property’s value. Don’t be bullshitted by Brokers who simply will tell you what you want to hear for your listing!!!