Like many markets throughout the country, the South Florida real estate market has been on a tear for the past year. One particular segment of the South Florida real estate market has seen exponential growth though. The luxury market, which is defined as single-family homes or condos priced at $1 million and up, has seen unprecedented growth.
As a matter of fact, the South Florida luxury market has seen a record pace of sales activity and price gains during the first quarter of 2021. The counties of Miami-Dade, Broward, Palm Beach, and Martin, have recorded year-over-year increases of 116.2% in completed $1 million-and-up single-family sales and 131.5% in condominium transactions. As of now, it appears that the second quarter of 2021 could be even stronger.
The perfect storm
So what is causing this spike in demand for luxury housing in South Florida? It appears that multiple factors combined are contributing towards this tremendous growth. Domestic migration from high-tax states, a brutally cold winter around the country, and historically low interest rates are fueling this growth. In addition, the overall handling of the pandemic and reopening of the Florida economy has also contributed to the domestic migration. With many Americans fleeing more expensive states, many luxury homes in South Florida seem reasonably priced.
In the first quarter of 2021, South Florida’s total high-end single-family sales rose by 826 to 1,786. Needless to say, in one year luxury home sales more than doubled. The average sales price increased 20.1% year-over-year, from $2.55 million to $3.06 million. Cash sales also increased with a 126.7% gain from 460 to 1,043.
As for luxury condo sales, they jumped from 425 in the first quarter of 2020 to 984 in the first quarter of 2021. The average sales price rose 8.1% year over year, from $2.23 million to $2.41 million. Cash sales also increased 139.3%, from 303 to 725.
It important to remember that for many Americans migrating to Florida from more expensive states, the luxury home prices here are not too alarming. In fact, we often see out-of-state clients pleasantly surprised when they realize what a million dollars will buy them in South Florida as compared to their home states. If you are a local buyer in the luxury market, it is important that you take advantage of your proximity advantage compared to many out-of-state buyers. In fact, we recently represented an out-of-state buyer in a bidding war for a property. In the end, our clients had the highest and best bid along with another local buyer. The seller ended up taking the same winning bid amount from the local buyer because they actually saw the property in person. (Our out-of -town clients were virtual buyers.)
Are you interested in buying a South Florida luxury home? At Live South Florida Realty, Inc. we specialize in the luxury home market throughout Palm Beach, Broward, and Dade Counties. Contact us today for a free consultation.