The Miami Beaches Market Pulse: 2015 Year End Wrap Up – (February 2016 Update)

Miami Beach
Looking across the intracoastal waterway to Miami Beach

The Miami Beaches 2015 Year End Market Analysis

Hello and Happy New Year to All!  I am a little late in publishing this; life & business sometimes gets in the way; but 2015 is now history (as well as January 2016!).  However, data driven bloggers, like myself, and other analysts continue gathering and compiling their numbers (and putting their tax returns together like everyone else 😦  ) to make their reports.  Heck, it takes whole quarters (or more) for our own government to figure out if & when we enter a recession (obviously they are too wealthy for our own good 😉 ).

I pulled the latest & greatest RPR Market & Neighborhood Reports for the 5 zip codes constituting the Miami Beaches and present to you the December 2015 versus December 2014 Report.  Here are the results:

33139 – South Beach

While I cannot speak for other agents, my firm saw the most sales activity in South Beach compared to anywhere else on the Miami Beaches.  South Beach continues to have a tremendous allure both nationally and internationally.

Median Est. Home Value: $397K (Up 4.2%) / Median Est. Listing Price: $237K (Down –5.2%) / Median Days in RPR: 110 (Down –13.4%) / Sales Volume: 95 (Down –26.9%)

The 33139 Market Activity Report for December 2015:

Market-Activity-Report_Miami-Beach-FL-33139_2016-01-03-20-40-18

Sales volume continues to decline in year over year comparisons of each month; however, I am noticing signs of an inflection point in that the number of days listed before a property sells has dropped by nearly 14%.  If sales volume in the coming months flattens (by comparison to the prior year’s month being compared) or rises, it could potentially indicate a good time to buy in 33139.  My recommendations are based on long term (for the purposes of this blog); 5-10 years or more.  This blog is not intended (unless I specifically say so in a specific article) for Buy/Flip or Buy/Rehab/Flip strategies to be implemented upon.

December 2015 Neighborhood Report for 33139

Neighborhood-Report_Miami-Beach-FL-33139_2016-01-03-20-40-24

Listing Volume (number of homes currently listed for sale) is 50% higher than January of 2013.  This means there is a much greater number of choices available to the buyer.  While oceanside condos are holding steady, a now 13 month long correction in ask prices for homes being listed continues.  In addition, I recall 2 & 3 years ago there not being a large amount of high-end rentals available anywhere on the beaches during the October-April season.  This season I did a quick search on MLS spanning all 5 zip codes of the Miami Beaches for rentals that range between $7000 and $10000 dollars per month and found more than 300 of them!  Further analysis is necessary, but I am fairly confident the luxury market is taking a hit too.

33140 – North Beach

I am not quite sure what the problem is with this market but after several thousand dollars in Realtor.com advertising to acquire buyers for this zip code, I have yet to even show a property in this zip code over the past 2 quarters!  As a result I am on the verge of dropping it all together and seeing if I can buy another slot elsewhere.  Perhaps my luck will change?  With that said, here are the December 2015 versus December 2014 numbers:

Median Est. Home Value: $481K (Up 2.1%) / Median Est. Listing Price: $377K (Up 5%) / Median Days in RPR: 110 (Down –24.7%) / Sales Volume: 49 (Down –10.9%)

The December 2015 Market Activity Report for 33140:

Market-Activity-Report_Miami-Beach-FL-33140_2016-01-03-20-37-35

Clearly a rebound is occurring in this area (and I do happen to love the area personally…it just has not been my best zip code this year).  Sales volume has started to flatten (as I mentioned earlier how this might be a good thing) compared to prior month comparisons, where it was off 50% year over year, and the average number of days a property is listed before it sells has plummeted by 25%.  This is great news for Sellers in this market and a potential warning to Buyers who are looking.

Neighborhood-Report_Miami-Beach-FL-33140_2016-01-03-20-37-41

Listing Volume is 50% higher than it was during the same time period in 2013, however, over that same period of time home values and asking prices have remained stable / mostly unchanged.  This is an area that is currently undergoing many changes in terms of both demographics, new construction, and rehabilitation of older buildings.  I believe it represents a great investment opportunity and it is genuinely a very safe, beautiful area to live.

33141 – North Bay Village & Atlantic Heights

This area, in my opinion, represents one of the greatest values anywhere for the location alone.  The median home value is 100,000+ dollars less than ANYWHERE else on the Miami Beaches.  Average Income Families can actually afford to buy and live here!  I think it is grossly undervalued relative to it’s long term (5-10 years) potential.  In addition, it has a wonderful “small town” / “village” feel & appeal.  New construction is on the rise, and that will absolutely, at some point, begat more assemblage deals for the real estate brokers and developers; and ultimately this area will begin to resemble the other 4 zip codes.  My recommendation is to buy, hold/rent and buy often.

Median Est. Home Value: $271K (Up 10.7%) / Median Est. Listing Price: $185K (Down –22.6%) / Median Days in RPR: 95 (Down –18.8%) / Sales Volume: 60 (Down –38.1%)

The December 2015 Market Activity Report for 33141:

Market-Activity-Report_Miami-Beach-FL-33141_2016-01-03-20-35-11

Once again, listing volumes are over 50% higher than two years prior, sales volume is lower than any time over the past 2 years, and the median listing price is substantially lower, which I attribute to an increase in the number of 1 and 2 bedroom homes in older buildings that quite probably need either rehabilitation or demolition.  I believe this area is two or three real estate cycles from achieving a peak in greatness and desirability; but I would hesitate to call investment here speculation given the values I have personally found, shown and sold in this area (I will not be discontinuing this zip code with Realtor.com if that tells you anything).  To boot, the neighborhood is wonderfully better than it was 10 years ago.  Change is happening; but as we all know in real estate, it happens over years, not days or weeks.

The 33141 Neighborhood Report:

Neighborhood-Report_Miami-Beach-FL-33141_2016-01-03-20-35-22

33154 – Bal Harbour

Certainly one of the most desirable zip codes to live in within the continental United States.  Bal Harbour represents the epitome of affluence with a far more conservative appeal than anywhere else on the Miami Beaches.

Median Est. Home Value: $648K (Up 22%) / Median Est. Listing Price: $387K (Down –7.8%) / Median Days in RPR 119 (Down –9.8%) / Sales Volume: 60 (Up 17.6%)

This is perhaps the best report and comparison I have seen since I began reporting on the beaches just after the market correction began.  33154 has begun to rebound strongly.  Sales Volume is up, Average Number of Days on the Market is down, and the estimated home values have rocketed by 22% in a single year!  In my opinion, an investment in Bal Harbour is akin to buying a “blue chip stock”.  Even during the recent correction it suffered the least, and it appears that it is the first to begin rallying back.

The December 2015 Market Activity Report for 33154:

Market-Activity-Report_Miami-Beach-FL-33154_2016-01-03-20-31-19

Sales Volume, when compared over a 2 year period is above average. Listing Volume is also higher than at any time in the prior two years, however, median listing prices have sharply moved higher since July of 2015.  Median listing prices continue to find support at 375k.

Neighborhood-Report_Miami-Beach-FL-33154_2016-01-03-20-32-56

33160 – Sunny Isles, Golden Beach & Eastern Shores

HOME…that is what I am proud to call Sunny Isles Beach.  Ever since I was a child and my family would vacation here (when it was still North Miami Beach), I always knew I wanted to live on this little stretch of sand.  Back in those days, this was one of the seediest places in all of Miami-Dade County.  However, in the past 20 years Sunny Isles Beach has seen one of the greatest booms and gentrifications in US History (I am willing to bet).  Where once stood small, dilapidated hotel/motels, now stand massive, high-end towers reaching into the sky.  Where rag tag shops used to litter the shopping centers now stand 3 star or better restaurants and designer boutiques, not to mention the sheet concentration of real estate brokerages here is pretty amazing!

Median Est. Home Value: $352K (Up 3.6%) / Median Est. Listing Price: $225K (Down –9.6%) / Median Days in RPR: 113 (Down –11.7%) / Sales Volume: 97 (Down –32.6%)

The December 2015 Market Activity Report for 33160:

Market-Activity-Report_North-Miami-Beach-FL-33160_2016-01-03-17-56-12

Considering where the numbers started when I began blogging the Miami Beach Market Pulse, 33160 appears to have improved somewhat.  Sunny Isles Beach was particularly sensitive to the investment appetites of foreign nationals, and as the Dollar appreciated against every other currency in the world, this led to a drying up of buyers in the general market.  It also exposed foreign buyers to a greater debt load as the dollars they borrowed became more expensive to repay (and this is an ongoing fact that has not fully resolved or come to a head yet).  In addition, a great deal of foreign economies are net commodity exporters; and since commodities of virtually every kind (oil, sugar etc) have crashed, I imagine business is not booming the way it was in the prior decade as commodities soared before and during the mortgage crisis.

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The Miami Beaches Market Pulse: The Market Correction Continues…

Miami Beach
Miami Beach

The Miami Beaches Market Report:

January 1st 2015 – September 4th 2015 (October 2015 Update)

As the summer in Miami Beach came to a close I ran these reports on the five zip codes constituting the Miami Beaches ahead of the Labor Day Weekend.  My last report was published shortly before the end the Spring and just ahead of the Memorial Day Weekend; and it was quite was alarming.  Using data from Realtor’s Property Resource, an authoritative database for all transactions listed via the Multiple Listing Service, when compared to the same time period in 2014, transaction volume on the Miami Beaches had plummeted by 30-50% and listing volume was up sharply.

Since then, the stock markets, worldwide, have roiled over the uncertainty surrounding the future of interest rates, let alone the world’s reserve currency, the US Dollar; which, albeit stronger in the last couple of years, remains fixed in a 30+ year long downtrend.

US Dollar remains in a long-term downtrend
US Dollar remains in a long-term downtrend

The recent upswing in the Dollar resulted in properties being more expensive to foreign nationals, and for this reason, amongst others (i.e new construction), I believe is the root cause of what is currently happening along the Miami Beaches.  Please note that the data below DOES NOT include pre-construction or new construction purchases; but also keep in mind that there is virtually nothing, of consequence to the numbers, in the new construction category within the Miami Beaches that is priced under one million US Dollars.

The Miami Beach & South Beach (33139) Market Report

Below is a link for the 33139 Market report.  The data is summarized as follows:

Median Est. Home Value: $397K, Up 10.5%; Median Est. Listing Price $185K, Down –21.1%; Median Days in RPR 105, Down –9.5%; Sales Volume: 87, Down –48.5%

The Miami Beach & South Beach (33139) Market Report

Below is the Neighborhood Report for 33139.

The 33139 (South Beach) Neighborhood Report

As you can see, Home Values continue to rise despite market weakness, however, I expect a shift in this as Median Listing Prices are down substantially and homes are on the market longer.  In addition, the chart goes back as far as 2012, where there were circa 1500 homes listed in the South Beach Market.  Listing Volume has more than doubled in the last 3 years having passed more than 3200 listed homes currently on the market!  Naturally, Median Listing Prices have been declining over the same time period as Sellers wake up and realize their home is not worth nearly as much as they imagined.

The Miami Beach & North Beach (33140) Market Report

Below is a link to the Miami Beach (33140) / North Beach Market Report.  The data is summarized as follows:

Median Est. Home Value $489K, Up 7.1%; Median Est. Listing Price $340K, Down –5.4%; Median Days in RPR 107, Down –4.5%; Sales Volume 62, Down –34%

The Miami Beach & North Beach (33140) Market Report

Below is the Neighborhood Report for Miami Beach / North Beach 33140

The Miami Beach / North Beach (33140) Neighborhood Report

The 33140 area lies immediately to the north of South Beach, 33139 and is, with respect to home ownership and other demographics a stark contrast to South Beach.  North Beach is more of a full-time resident neighborhood and has far less tourist traffic than 33139.  However, it is also not immune to the market correction we have been seeing.  Again, Home Values continue to increase, while Listing Volume also continues increase, having nearly doubled in the last 3 years.  More owners than renters exist in this market, and in my opinion, it is a more family friendly zip code to live in.  Median List Prices are relatively flat year over year, and I expect this sideways trend to dip lower as listing volume increases.  When looking at the the Price Range of Homes Sold, it should be noted that nearly 1/3 of all sales were over $1,100,000 USD.

North Beach & North Bay Village (33141) Market Report

Below is a link to the Miami Beach / North Bay Village Market Report.  The data is summarized as follows:

Median Est. Home Value $267K, Up 6.5%; Median Est. Listing Price $150K, Down –32.7%, Median Days in RPR 85, Down –24.1%; Sales Volume 58, Down –52.1%

North Beach & North Bay Village (33141) Market Report

Below is the Neighborhood Report for Miami Beach & North Bay Village, 33141

Miami Beach & North Bay Village (33141) Neighborhood Report

Following the greater trend, Home Values continue to rise but the Median Listing Price has fallen off a cliff, now down 32%.  I sold a couple of homes in this area in the past quarter and noticed that the recent Market Correction has brought in Ready, Willing and Able American Buyers (both were soon-to-be Retiree Couples).  The Average Days on the Market also fell substantially as Buyers looking for a deal are snatching up properties in this area.  I think that for a second home, investment property, or wanting to simply live in the area of Miami Beach, the best values can be found in this particular neighborhood right now.  It is absolutely a Buyer’s Market with Sales Volume down more than 50% and Listing Volume having more than doubled in the past 3 years.  This is a weaker market than the North Beach (to the south) and the Bal Harbour (to the north) Markets, and in my view, it has led the market correction on the beaches as a result.  I expect the other markets, to a degree, to follow suit prior to the Spring of 2016 (although from May 2015 to September, Bal Harbour has taken quite a beating.  It was “leading” the markets (in terms of resilience at least) in May.)

The Bal Harbour, Bay Harbor Islands & Surfside (33154) Market Report

Below is a link to the Miami Beach / Bal Harbour & Bay Harbor Islands (33154) Market Report.  The data is summarized as follows:

Median Est. Home Value $629K, Up 16.9%; Median Est. Listing Price $323K, Down –23.7%, Median Days in RPR 107, Down –10.8%; Sales Volume 25 Down –62.7%

The Bal Harbour, Bay Harbor Islands & Surfside (33154) Market Report

Below is the Neighborhood Report for Miami Beach / Bal Harbour (33154):

The Miami Beach – Bal Harbour (33154) Neighborhood Report

Bal Harbour is one of the wealthiest communities in the United States, home to one of the most exclusive malls in the world (The Bal Harbour Mall), and is an absolutely beautiful place to behold.  However, it has not been able to hold up against the market correction as well as it was doing back in May when I published my last report.  While, once again, Home Values continue to rise (and substantially here, +16%), Median Listing Prices are down by nearly 25% and Sales Volume is off by a whopping 62.7% (I am glad I am not an agent only specializing in Bal Harbour!).

Listing Volume is at a 3 year high and is currently double what it was in January 2012.  Median Listing Prices have broken through a support range of 375K and are continuing to fall.  One third of all listings sold were under 400K and another third of all homes sold were over 900K.  Therefore this recent market correction has obviously spared no one.  I expect market turnover to continue until Listing Volume begins to decline.

The Sunny Isles Beach, Golden Beach & Eastern Shores (33160) Market Report

Below is a link to the Sunny Isles Beach & Eastern Shores, 33160 Market Report.  The data is summarized as follows:

Median Est. Home Value $356K, Up 9%; Median Est. Listing Price $195K, Down –20.4%; Median Days in RPR 109, Down –12.1%; Sales Volume 113, Down –38.9%

The Sunny Isles Beach, Golden Beach & Eastern Shores (33160) Market Report

Below is the Sunny Isles Beach & Eastern Shores (33160) Neighborhood Report:

The Sunny Isles Beach & Eastern Shores (33160) Neighborhood Report

I have lived in Sunny Isles Beach for the last 7 years and I know this town well.  In fact, I am pretty sure the data has improved in this zip code substantially in the past month due to the sheer volume of Buyers who have called me interested in taking advantage of the recent market correction here.  While Home Values Improved, the Median Listing Price dropped substantially, at one point was off by nearly 30%.  Listing Volume has climbed steadily however, and is currently sitting at a nearly 4 year high.  In September, the trailing 12 months of Sales Volume was off nearly 40%, but a recent spate of closings I believe has reduced this to less than 5%.  Keep in mind that a very substantial demographic change is currently underway in Sunny Isles Beach.  With the construction of numerous beach front condominiums, a breed of extraordinarily high net worth people have been scooping up pre-constructions prices STARTING at $1400 per square foot!  In turn, I have seen a number of beach condominium owners, also wealthy, but, not as wealthy as the newer beachfront apartment buyer, put their condominiums up for sale and inquire about making a purchase on the intracoastal side of the barrier island, an area of older, smaller, less expensive homes and apartments.  This bodes well for home values and tax receipts to the City of Sunny Isles in the future as the demographic of this city becomes, on average, even wealthier.  With few exceptions, I do not see prices declining much further here, however, I do see rents continuing to skyrocket as a result of this shift.

Outlook

Despite the market correction on the beaches, Miami continues to be a top international destination, and barring an apocalyptic event, I do not see that trend softening, let alone reversing, any time soon.  For the last 5 years inbound traffic and hotel stays have set records year after year, room rates continue to rise, and tax revenue from tourism continues to increase substantially.  In tandem, massive non-residential commercial investment continues to pour into Miami-Dade County, and Southeast Florida as a whole.  While the vast majority of the United States, I expect in the coming 1-2 years, will take an economic beating as a result of our Country’s ludicrous fiscal and monetary policies, The Miami Beaches and the City of Miami, I believe, will weather whatever the coming economic storm may bring for numerous reasons.  First of all, the Baby Boomer Generation is retiring at a rate of 10,000 people per day (or 1 person every 8 seconds); and many of them have their eyes set on the warm Sun, sandy beaches and green palm trees of the South Florida subtropical climate.  In addition, even if the Dollar takes a hammering, in an array of ways, that will boost foreign direct investment as wealthy foreign nationals seek to escape from harsh taxation & regulations in their home countries (and our policies are no picnic!).  With that in mind, it should be noted that we are looking at a Buyer’s market here on the beaches and this is an opportunity that prospective buyers should, at the very least, look at closely with a knowledgable & reputable real estate broker.

Lastly, I would like to apologize to my readers for having not published another market update report sooner.  I am extremely busy servicing my own customers & clients (who get the benefit of my analysis and insights on request) in both a residential & commercial real estate capacity; and therefore my time has been constrained with respect to Publishing & Marketing.  As my firm grows, I expect to be able to publish on a more regular basis.

Thank you for your time and attention!

Cheers,

Miami Realtor, Miami Real Estate Professional
Christopher Lazaro, MBA – Licensed Real Estate Broker & International Realtor of Miami, 305-517-3086 x333

Are Prices too High? Miami Beach Real Estate Transaction Volume Plummets!

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%  !!!!

Market-Activity-Report_Miami-Beach-FL-33139_2015-05-12-20-29-24

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%

Market-Activity-Report_Miami-Beach-FL-33140_2015-05-12-20-30-25

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%

Market-Activity-Report_Miami-Beach-FL-33141_2015-05-12-20-29-49

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%

Market-Activity-Report_Miami-Beach-FL-33154_2015-05-12-20-29-38

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%

Market-Activity-Report_North-Miami-Beach-FL-33160_2015-05-12-20-29-07

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.

RUB to USD Chart
RUB to USD Chart

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.

Cheers,

Miami Realtor, Realtor of Miami, Miami Real Estate
Christopher J. Lazaro, Miami Beach Real Estate Broker & REALTOR®

T: 1-800-798-9192 x333