‘Smart money’ buys multi-million Miami homes
In 2013, homes selling for at least $1 million accounted for an astounding 20% of single-family home sales. A year later, brokers don’t see that trend ebbing any time soon.
“Demand continues to be strong for the luxury market,” said Peggy Fucci, president and CEO of One World Properties. “Our economy has recuperated and our tax climate is very favorable.”
Ms. Fucci says she sees luxury buyers who are moving their families, including children, to Miami.
“There are a lot of executives of multinational firms moving down here, and a lot of kids are coming mid-year into the school system. These people are buying homes worth more than $1 million.”
Key Biscayne, Pinecrest and Coral Gables “always resonate very well with buyers, because of the schools,” she said, as do some of the western suburbs in Broward County.
Financial insecurity abroad will continue to be a driver, she said. “What’s happening in Brazil and Mexico affects us; we’re seeing a lot of international money. I think 2015 is going to be one of the best years we’ve ever had.”
“Miami is the new global city, in my opinion,” said Richard Goihman of the Goihman Group at Douglas Elliman Real Estate. Many factors propel luxury real estate values, he said. “The city is growing up. Art Basel is a part of that, but it’s also the growth in the arts, and the sports and entertainment industries, among other things.”
World-renowned architects are choosing Miami for their projects, which adds to the city’s cachet, he said. “These are some of the most beautiful buildings on the planet.
“Miami is attracting people from all over the world, which we never had before,” he said, “and they are looking for something that is not offered anywhere else.”
Mr. Goihman, who said ultra-luxury real estate represents 90% to 100% of his business, said he has seen Manhattan-style prices of as much as $3,000 per square foot, particularly in Miami Beach.
Along with international buyers, his clientele includes some New York City buyers, in whose judgment Miami is a comparatively good value, he said.
In 2013, luxury prices jumped 9% to 10%, then slowed down to about a 5% increase last year, Mr. Goihman said. “I think it’s going to be the same this year,” he said, which he considers positive.
“It’s healthy for both buyers and sellers,” he said, and small, steady gains are more sustainable than large price jumps. “I think it’s going to continue to be a great market.”
“The prices of everything are going up,” said Gil Dezer, president of Dezer Development. “There is not enough land in South Florida to satisfy buyers; the demand is constant.”
His clientele includes buyers who are looking for their second, third, fourth or fifth home, he said, but often they end up spending most of their time here. “I have a ton of New York buyers, lots of South Americans, Europeans, people from all over the world,” Mr. Dezer said.
The Sunny Isles market, where he is active, is particularly hot, he said. “Even if the market drops off a bit, Sunny Isles will still be strong.”
Like Ms. Fucci, he sees the relative stability of the US financial system as a draw. “When things are unstable, the smart money is going to leave. They’d rather invest here than put the money in a bank that could shut down, and you can’t blame them.”