Lockdown paralysis ended with a roar as luxury home buyers fled taxes elsewhere, creating a third-quarter surge in South Florida.
After a whopping 55.6% drop in year-over-year luxury sales in the second quarter, third-quarter sales of existing homes skyrocketed by 65.2% for single-family houses and by 18.2% for condos when compared with the same period in 2020, according to the latest Keyes Luxury South Florida Market report. The firm based its findings on data from the Multiple Listing Service for residential sales priced over $1 million across Palm Beach, Broward, Miami-Dade and Martin counties.
“The opening after the shutdown created a surge of pent-up demand that exploded the luxury market. What happened is that the shutdown accelerated the decision-making of everyone that was thinking that they wanted a bigger home or a Florida home. When they were given the chance, they jumped on it,” said Mike Pappas, the CEO and president of the Keyes Company.
Buyers, both full-time and second-home owners, are coming from New Jersey, Connecticut, California, New York and California. Many are part of the tax flight set off by the SALT deduction, Pappas said.
“For the real estate market in general, it’s a V-shaped recovery,” Pappas said. “It looks like it might resemble a Nike-check-mark recovery.”
The sales activity is diminishing luxury inventory. As of September 2020, Miami-Dade and Broward have eight months supply of single-family homes — a dramatic decrease over the 21-month supply of September 2019. Both existing and new residents have flocked to single-family homes amid the pandemic, seeking less density and open space.
In terms of condos, the two counties together have 30 months of supply now versus 44 months during the third quarter of 2019.
“The real estate market has never been as hot as it is today. ‘Home’ has taken on a different meaning due to COVID. It’s taken on a more important role. You’re going to school there, you’re working there,” Pappas said. “We’ve always been a safe haven since George Merrick was promoting Coral Gables as City Beautiful. South Florida has had a charisma and charm that has appealed to the world.”
In Miami-Dade, single-family luxury home sales increased by 48.3% year-over-year, from 292 to 433. The median sales price rose by 8.6%, from $1.612 million to $1.75 million. The number of all-cash buyers more than doubled, from a total of 82 to 174 in the third quarter 2020.
Buyers are gravitating to Coral Gables and Miami Beach, Pappas said.
Condo sales rose by 5.9%, from 202 to 214 in the third quarter of 2020. The median sales prices climbed by 7.8%, from $1.6 million to $1.725 million. The number of all-cash buyers increased from 123 to 128.
For condo buyers, the hot spots were Aventura, Brickell, Coconut Grove and Miami Beach, Pappas said.
The number of single-family home sales grew by 67.4% from third quarter 2019 to 2020, from 193 to 323. The median sales price rose by 8%, from $1.733 million to $1.871 million. The number of all-cash buyers rose by 56.1% year-over-year, from 82 to 128.
House hunters are primarily searching Las Olas, Rio Vista, Pompano, and Weston, Pappas said.
Condo sales increased by 27.7%, from 47 to 60. The median sales price decreased by 1.8% — a “minimal drop,” Pappas said — from $1.556 million to $1.527 million. The number of all-cash deals grew by 32.3%, from a total of 31 to 41 in the third quarter 2020.
Condo buyers are primarily looking at Fort Lauderdale, Pappas said.