It’s a good year to snatch up some luxury real estate
According to ONE Sotheby’s International Realty’s year-end report, 2017 will be a buyers market thanks to an abundance of luxury options available. Sellers are expected to reduce their prices, particularly in the $1 million to $5 million range.
That is thanks in part to the end of the election season and an increase in consumer confidence, said Anthony Graziano, senior managing director for Integra Realty Resources — Miami/Palm Beach, which produced the report.
“I think a lot of people delayed purchasing decisions, waiting to see what was going to happen in the economy and the election and everything else,” Graziano said.
Waterfront prices decrease
In 2016, Miami-Dade County had 36 percent more single-family homes available in the $1 to $5 million range than in 2012, according to the report. The number of single-family homes in that range was up nearly 25 percent in 2015 over 2012, while prices were lower by 3.5 percent.
“Most of that product tends to be on the waterfront, and as a result, the waterfront pricing took a hit because there is more inventory,” Graziano said.
Miami-Dade prices for non-waterfront properties, both single-family homes and condos, rose in 2016 by 9 percent, he said.
This year, the majority of Miami-Dade single-home sales are expected to be in the under-$1 million market, the report said, forcing sellers for higher-priced homes to bring down their prices.
Brickell, downtown Miami, Edgewater and Midtown continue to lead the market, with almost 60 percent of all new units being delivered in 2017 and 2018, the report said. After 2018, Sotheby’s predicts a shift in new units to Miami Beach, Sunny Isles and Hollywood Beach, followed by a smaller number of boutique units in South Beach, Miami Beach and Surfside.
Also incentivizing buyers this year is the specter of higher interest rates, which are expected to increase twice in 2017.
“If interest rates are continuing to go up and the market senses that, that’s going to bring people up from the sidelines to buy at this price and lock in my interest rate for five to six years,” Graziano said.
In the condo sector, a slowdown of buyers from Latin America is expected to continue, while domestic buyers and those from Canada and Europe are expected to increase.
“Remarkably, the Miami brand continues to sell worldwide, and long-term trends indicate no reversal in Miami’s fortune as the dominant gateway city along with NYC and San Francisco,” the report said.
Still, the overall condo market is expected to remain choppy. The loss of Latin American buyers will drop waterfront condo prices by another 5 to 8 percent. Non-waterfront condos are expected to drop their prices by 3 percent, making it a good time to buy a resale condo in Miami.
But new units are projected to maintain or increase prices.
In Broward County, the single-family-home market is expected to continue its growth from 2016. Broward homes, in large part because of their value, are priced 30 to 50 percent less expensive than comparable homes in Miami-Dade, the report said.
The condo market will benefit from an influx in domestic retirees that will snatch up properties in Broward, instead of Miami-Dade, because the dollar stretches farther, Graziano said.
“People make housing choices and say, ‘You know what? I’m going to go here,’ ” Graziano said. “They don’t have to move to Miami. For them, this is their retirement home, so more people are looking at Broward as an alternative.”
A positive economy — Florida was one of four states in 2016 with 3 percent employment gains — is likely to drive the region to a successful 2017, the report predicts.
“I personally think 2017 is going to be a better overall year [than 2016]” Graziano said.