Economists and real estate professionals have no way of definitively forecasting the market, some suspect Miami and South Florida’s real estate prices are too high and a correction may be coming. However, few believe it will resemble the crash of 2008-2009 and the Great Recession, where homes lost significant value and sellers flooded the market. Renewed migration to Florida spurred by the pandemic is bringing upward of 1,000 individuals and countless corporate relocations to the state each day. * Economists believe that trend will evolve into a permanent reality; those who moved here for what they thought was a temporary escape from Covid will take residency. This leaves buyers to weigh their options. High-net-worth investors with the cash on hand to buy outright a home ranging from $1 million to $5 million must consider whether a cash buy would be more advantageous than securing a 50% to 70% loan. Only the investor and their financial advisors, when working with the latest figures and market realities, know what is best for their unique circumstances.
South Florida’s current real estate market is an exercise in supply and demand. As demand rises in the residential sector, inventory of available luxury single-family and condominium properties continues to remain near historic lows. High-net-worth individuals, including business owners, financiers and hedge-fund heads and executive-level transplants are competing for these properties. This presents an additional challenge for international and especially Latin American buyers looking to find the right property as a primary residence, a second home or an investment-grade rental. From August 2019 to July 2020, foreign buyer purchases of existing single-family and condominiums/co-ops in Florida was $15.6 billion, a slight decline from the year prior but still accounting for 11% of total dollar volume of Florida existing home sales, notes the National Association of Realtors and Florida Realtors. Foreign buyer purchases were 8% of Florida’s existing home sales; nationally, foreign home buyer purchases comprised 3% of all existing home sales. South Florida Sun-Sentinel, luxury single-family sales by regional brokerage The Keyes Co. hit 1,786 in first quarter 2021, from 826 the same period last year. More compelling, average closing prices went from $2.55 million to $3.06 million, or a 20.1% increase. Cash sales during that period went from 460 to 1,043. New contracts for million-dollar-plus houses in Miami-Dade County in November were up 54% over last year. South Florida Sun-Sentinel, luxury single-family sales by regional brokerage The Keyes Co. hit 1,786 in first quarter 2021, from 826 the same period last year. More compelling, average closing prices went from $2.55 million to $3.06 million, or a 20.1% increase. Cash sales during that period went from 460 to 1,043. New contracts for million-dollar-plus houses in Miami-Dade County in November were up 54% over last year. As restrictions on foreign travel loosen, rates remain at historic lows, and Miami’s place in the global spotlight glows, some forecast the second half of 2021 will see more Latin American buyers turn their sights to Miami with traditional financial models available to most U.S. buyers also available to them.