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.
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.
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%
Below is the Neighborhood Report for 33139.
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.
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%
Below is the Neighborhood Report for Miami Beach / North Beach 33140
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.
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%
Below is the Neighborhood Report for Miami Beach & North Bay Village, 33141
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.)
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%
Below is the Neighborhood Report for Miami Beach / Bal Harbour (33154):
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.
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%
Below is 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.
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!