Coral Gables $1 million and up residential market strong
The Coral Gables $1 million and up residential realty market stays strong even in the face of upcoming elections and global market issues, with serious buyers purchasing from serious sellers. But experts say they expect an unsubstantial pause in the market soon.
“I think it’s a healthy, normal market,” said Christina Pappas, realtor and Coral Gables assistant district sales manager for The Keyes Co.
“We’re not used to the normal market. From 2011-2014 we’ve seen some adjustments in the market like incredible increases in appreciation, adjusting for incredible depreciations in the market.”
“Coral Gables is a $1 million and up total market,” Ms. Pappas said. “The nuances you’re seeing in the market are really between the $1 million and up in Coral Gables versus the new construction”
“It’s changing from what we saw in 2011-2014. We’re not seeing those double-digit appreciations. It’s a normal market with real sellers and real buyers,” she said.
“I think the market is healthy now but trending towards slowing down,” said Riley Smith, real estate agent at EWM’s Coral Gables-South Miami office.
Since the beginning of the year there has been a slowing number of transactions, he said, but numbers remain in good condition nonetheless.
“We all know Miami is a very international city and the strong dollar has certainly not helped us, so we’ve seen less international buyers,” Mr. Smith said.
“I do think that the global market caused a little bit of a pause,” Ms. Pappas said.
“Just in my experience, running up to elections means people are hesitant and distracted,” Mr. Smith said, explaining that those involved in the market are waiting to see what – if anything – will change after the elections.
“A lot of people are saying ‘People aren’t going to put their house on the market, they’re going to wait and see,’” Ms. Pappas said. There may be a pause from buyers waiting to see what happens, but she’s not convinced that this will have noticeable effect on the market.
“The government probably won’t make any major changes as far as anything that’s going to drastically change the market,” she said.
“I don’t predict by any means a crash or bubble breaking – just a pause,” Mr. Smith said.
“I think the cut-off is not $1 million anymore. The cut-off is more like $2 million… $500,000 to $1 million is entry pricing. $1.5 million-$2 million has a slow down and then we’re really seeing the slow down at $2 million and up.”
From January to June of this year, the $1 million and up single-family home market saw an average of 20 units closing per month. January to June of last year saw the same figures, Ms. Pappas said.
From January to June of this year, there was an average of 300 single-family properties available per month in the $1 million and up market, she said. Last year, the average number of properties available was 250 per month.
“So we’re still closing the same amount, but there’s more in the market,” Ms. Pappas said. “It’s great to see more in the market. When the economy is good and people trust what’s occurring in the economy, they put their homes for sale – when the economy is bad, no one sells.”
“I do think that with increased inventory means that we’re only going to see appreciation in the single digits.”
“As a rule of thumb, the closer you price to where you think it will close, the faster it closes. I do think that this stronger market may see people testing the market a little bit, feeling comfortable,” she said.
Of the $1 million and up single-family units sold from January to June last year, the properties spent an average of 160 days on the market. This year, that number has increased minimally to 170.
“It’s not that much of a difference even when there is more inventory,” Ms. Pappas said. The rise in properties on the market from January to June of this year is a “positive thing,” she said.
“I think we’re going to stay pretty even – not increase like we did from 2014 to 2015 – maybe see a nice little increase. That [2014 to 2015] was really a correction and it was a major correction.”
“Basically we needed to get property values back to normal in 2011, 2012, 2013,” Ms. Pappas said. “In Coral Gables alone the distressed properties are low so those bargain deals, those don’t exist.”
From January to June last year, the average price per square foot for $1 million and up single-family homes was $521.83. In February of last year, the average was $485 after removing an outlier of $705, roughly $200 more than the second highest price, from the calculation. This year, the average was $491.
“You’re getting more for the home,” Ms. Pappas said.
“In eight years we haven’t seen a normal market. There are people in this market that have held on to property that they are just starting to sell. There are people getting in now that don’t know what the market looked like before.”
“Finally we’re having the single-digit increase – this is normal appreciation,” she said.
If everything continues as is, Ms. Pappas said, the market isn’t going to see major changes.
“Coral Gables does a lot for its community in order for its homeowners’ properties to hold value. A lot of people are willing to spend more because they know values do hold… Coral Gables prides itself on making sure properties hold their value.”