Europeans snapping up Miami residences
By Marilyn Bowden
Prodded by unrest in the Euro Zone and good value in the local market, Europeans are snapping up residential properties in Miami-Dade.
"In the past three or four months we've seen a tremendous pickup out of Italy and France in particular, especially in downtown and Miami Beach," said Philip Spiegelman, founder & chair of International Sales Group, or ISG.
"In our office, 74% of all our sales are to individuals whose permanent residence is outside the US," said Frank Jewett, broker and district sales manager in The Keyes Co.'s Miami Beach office. "Inventory has reduced significantly in the past 60 days, and many buyers are waiting for anything that comes on the market to make an offer immediately."
Recently, he said, three units in the $2 million range at Canyon Ranch, listed on a Saturday, were all contract-pending by Sunday.
It's the kind of activity, Mr. Spiegelman said, that he would have expected two years ago, when prices were lower and the euro was stronger against the dollar than it is now.
"I attribute this 100% to the complete and utter unrest and instability of the Euro Zone economies," Mr. Spiegelman said.
Miami real estate, though increasing in value, is still undervalued compared with similar properties in London or Paris, said Nathan Zeder, a broker-associate at EWM Realtors' Coral Gables office.
"They can get so much more for so much less here," he said, "and the turmoil in their own economies makes us look like a safe play."
Mr. Spiegelman said prices in Miami are still bargains compared with real estate values in most other major world cities, "to the tune of 50% to 60% per square foot less. Even with a lower exchange rate, prices are still below replacement costs."
In general, Mr. Jewett said, European buyers are buoying up the luxury end of the market.
"Most are buying condos over $1 million," he said, "and 87% are cash transactions."
He pointed out that the buyer in the recent $47 million sale of an Indian Creek mansion — a new high-water mark for Miami real estate — was Russian. That could be topped: the Versace mansion on Miami Beach recently came on the market for $125 million.
But in general, Mr. Zeder said, the Europeans he represents are looking to spend $1,000-$2,000 a square foot.
In addition to the French and English, whose interest has been fairly consistent, Mr. Zeder said, "Russians have been among the largest spenders recently. We're also seeing Germans, Spaniards and a decent amount of Swiss."
He said the multinational flavor of Miami is attractive to these buyers, since it lends the city a European air.
Historically, he said, the northern end of the county has attracted more Russians, with Western Europeans tending to settle throughout Miami Beach, from 60th Street south.
"Ideally, they want to get as close to South Beach as they can," Mr. Zeder said.
Buyers in luxury buildings are usually purchasing for their own use, Mr. Spiegelman said; in lower price ranges, they're often looking for a modest return on their investment, in the 3%-5% range, through renting the property.
"Most are buying properties they feel will increase in value or at least hold value," Mr. Jewett said. "Some are parking their money here. Russians and Italians tend to be owner-users, but they come and go. Some of the Germans are looking for multi-unit investment opportunities such as duplexes and fourplexes; so are some buyers from Sweden and other smaller countries. As result, prices in that market have increased significantly."
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