Stalling property prices suggest market correction in South Florida
After years of strong growth, Miami’s residential market is starting to cool due to China’s stock market volatility, low oil prices and currency devaluations in South America.
At the close of Q4 2015, median sales price in Miami Beach was down 6.1% to $375,000 compared to the same period last year. Condo median sales price also declined 6.6% to $330,000, according to the latest Elliman market report.
A similar pattern was seen in the luxury market, representing the top 10% of all sales. Luxury condo median sales price declined 9.4% to $2.4m while the pace of the overall market slowed as the number of sales declined and inventory expanded.
In contrast, median sales price of luxury single-family homes more than doubled to a record $12.5m, sending mixed signals about the state of the market.
Oryx World Portfolio leases and sells upmarket property across Miami, including the 500-unit Paramount Tower in Downtown. Managing director Ray Hogan says the contraction is to be welcomed as the market corrects itself after a long period of growth.
He explains, “The real estate sector in Miami goes in cycles and a cool-down ensures growth that can be sustainable. The current inventory supply is half that of 2007 to 2008, showing confidence and restraint on the part of developers to ensure they see the cycle through.
“We should see a nice pick up after 2016 and well into 2019,” he adds.
Meanwhile, Miami’s coastal mainland also showed mixed results. Median sales price increased 6.3% to $255,000 and average sales price was up 2.8% to $378,114. The median sales price of a single-family home increased 8.9% to $294,000 and the median sales price of a condo rose 2.4% to $215,000 respectively over the same period.
The number of single-family home sales, however, fell 13.9% to 1,876 and the number of condo sales fell 16.1% to 2,225 compared to Q4 2014.
The trends observed in the overall market were also seen in the luxury market where the median sales price of a luxury single-family home increased 2.3% to $1,125,000.
For details on Oryx World Portfolio property investments in Miami or further afield, please call +971 (0)4 446 2000.