waterfront prices show gap in home costs rising
waterfront residences continue to command higher and higher prices,
the gap between the average and highest home costs in Miami-Dade County
is growing wider.
some real estate professionals say this could be a signal for caution,
all agree that for the present the market remains strong.
average price of a home in Miami-Dade in first quarter 2000 was $153,045
4.6% higher than it was at the end of first quarter 1999, says
Michael Pappas, president of Keyes Co. Realty.
contrast, two recent sales of high-end properties were recorded at
$7.5 million and $8.425 million.
large gap like this occurs when there's a feeding frenzy at the high
end," Mr. Pappas says. "It usually means the market is at
the end of its turn. I don't think there's any question that that
holds true today."
10% hike is a result of the numbers getting pulled up by larger numbers
of more expensive homes, he says.
dot-coms, the sizzle of Miami, the economy, have made the city's east
markets the waterfront properties in great demand,"
Mr. Pappas says. "Demand outstrips supply. It's simple economics."
ultra-luxury was not too long ago defined as $1 million, he says,
"today even off the waterfront it's not unusual to see prices
of $1.5 million."
when the market jumps up because of a high-end feeding frenzy, Mr.
Pappas says, there's a corresponding collapse at the bottom of the
seen a little slow down lately," he says, "though there
is certainly no recession. We are certainly not at panic levels. In
fact, we may be headed for a more controlled and sustainable market."
Defortuna, president of Fortune International Realty, says the rise
in prices of luxury homes is indicative of specific market conditions.
Miami-Dade market has been growing larger and larger," he says,
"and for waterfront property there's much more demand than supply."
waterfront homes in Key Biscayne or Miami Beach don't come on the
market often, he says, and owners are able to ask higher rates.
addition, he says, very unusual and pricey properties
have changed hands recently, including homes formerly owned by film
actor Sylvester Stallone, singer Madonna and the late designer Versace.
that seem large in the sales price of ultra-luxury properties are
actually comparable to across-the-board increases, he says.
to the rest of the country," Mr. Defortuna says, "Miami-Dade
is still cheap."
he says, the ultra-luxury category represents only a small fraction
of the market.
Shuffield, president of Esslinger Wooten Maxwell Realtors, also stresses
that the numbers at the high end of the scale are very small.
March to May 2000, he says, 29 homes sold for more than $2 million
in Miami-Dade double the comparable period in 1999.
the inventory of homes priced over $2 million has increased 15%, he
says, while the total county inventory of resale homes has decreased
24% a year for two years.
that says is we have seen a much greater appreciation at high prices
than at other price levels," Mr. Shuffield says, "because
we have such a finite number of them 1% of the overall market.
that a cause for concern?" he says. "No. The spike at the
high end is not negative. It's just that living in a million-dollar
home is not as big a deal as it used to be.
are recognizing Miami as a world center and want to be here. We are
just now entering the level of super-luxury.
probably will see further appreciation in 2000 but I expect the rate
of appreciation to slow in 2001."
1975 Harvard Business Review published an article about the three
global communities of tomorrow Coral Gables, Honolulu and Paris,"
Mr. Shuffield says. "Now that has happened."