The 2020 Miami Real Estate Report and Forecast

The Q1 2020 Miami Real Estate Report

PART 1: THE 5 HOTTEST MIAMI REAL ESTATE MARKETS THAT SELL. WHAT NEIGHBORHOOD SUB MARKETS ARE SELLING AT ALL-TIME HIGHS?

The Q1 2020 Miami Real Estate Report

INTRODUCTION This blog is part 1 of an 8 part report in the ‘Q1 2020 Miami Real Estate Report and Forecast‘. What will become immediately apparent in this report is the screen sharing of both our ‘Advanced Analytics’ dashboard and our ‘Condo Geeks’ Dashboard. These are live systems that update either by the quarter or by the day.

Feeding directly from the Miami MLS, these systems ensure that our reports act as useful ‘historical points of reference’ or work as ‘evergreen’ material for buyers now or in the future. What will also be apparent is the sheer amount of verbalized social and economic narrative to accompany these tables, and because we actually sell real estate as opposed to just analyses it, we can talk from a point of experience and ‘in the field knowledge’. This is something that other reports and data providers have a very hard time doing because they don’t actually sell; lots of general data, nothing specific and little explanation and guidance to make individuals decisions. This report breaks that mold.

Part 1 covers the ‘hottest markets’, looking at their performance through Q1 of 2020, reflecting back on how this compares to their Q1 2019 performance and assessing their likely performance through the un-chartered waters of Q2 through Q4 of 2020. The market detailed below are specific neighborhood sub-markets that are really the most desirable places to live (a neighborhood market becomes a sub-market by virtue of price point). What you will notice is that the majority of these ‘hot’ markets are single family ‘primary market’ neighborhoods, driven by residents who live all year round in Miami. Many as you can well believe also happen to be ‘Tax Relocation’ hot-spots, which are currently driving a large number of purchases in our hottest markets.

The questions this section will raise are not just what are the hot markets, or why they are hot but more importantly if these hot markets can remain hot, if their price per sqft can climb further or if they have in all likeliness hit a peak or could even drop? In the current market it will also help manage buyer expectations.

In the face of current severe economic challenges we are seeing buyers attempting to successfully make offers well below market value (as much as 30%-40% in some cases). Although that may work in some markets, if the inventory is already low as it is in a number of these markets and good options are scarce then low ball offers will just be met with stone cold silence. If you are looking to vulture a deal in Miami then part 2 and part 4 which covers weak and vulnerable markets and condos will be an excellent read for you.

COCONUT GROVE HOMES BELOW $2M

CLICK TO VIEW MORE Coconut Grove Homes up to $1M Coconut Grove (along with Coral Gables) is a focal point for tax relocation buyers coming into South Florida and therefore one of the 5 hottest Miami real estate markets that sell. This neighborhoods single family market offers excellent perfect proximity to the urban core of Brickell and Downtown and airport. More importantly the organic development of the Grove, laid back international vibe, great dining, large parks and beautiful and serene tree lined streets, coupled with proximity to the best private school in the state make it a hotbed of focus for families. With that said it is not a particularly large neighborhood which makes it hard to get in under $1M. There has been little available in terms of single family homes in Coconut Grove under $1M through Q1, but the demand is high and when product does come on the market it closes in an average of 126 days. Months of inventory is at just 4.8 months (based on closed and pending sales), so demand is far outstripping supply. The townhouse market is also very hot and townhouses which act as alternatives to the more spacious single family home are also now comfortably achieving over $1M. We can attest to the speed of sales in the single family market with the sales of 2215 Lincoln Ave (one of our listings) never making it to market and selling in less than 1 day for nearly full price, because simply put there was little product choice.

As of the beginning of April, there are 13 pending and 39 Active listings in the market. Do not expect to get anything particularly elaborate at this price point, with a $ per sqft of $494 for sold homes and specifically $564 for those with a pool. In short this market has little room for negotiation and if you are luckily enough to find a decent finished 3 bedroom home in the market your best advised to jump on it. You should also seriously consider Coral Gables where you will find more options.

I don’t expect this market to correct in light that there is just not enough product, and the outbreak of Covid-19 only hinders agents ability to list properties. Once the restrictions on travel are lifted and the ‘flattening of the curve’ happens expect a nice influx of listings but recognize that it will be met with an equal amount of ‘pent-up demand from buyers who have been waiting in the wings’.

CLICK HERE TO SEE ACTIVE LISTINGS UP TILL $1M

CLICK TO VIEW MORE Coconut Grove Homes between $1M – $2M Once you get into the $1M – $2M range the story is much the same as the $0-$1m range. With just 6.2 months of inventory we are statistically looking at a balanced market / flirting on the edge of a buyers market. A sellers market is under 6 months of inventory and a buyers market is over 6 months. My observations in the field is that the number of excellent homes in the price point you can typically count on one hand. Once again David Siddons Group holds the record here for the highest price per SqFt sold in this neighborhood with the sale of 3531 E Glencoe St. This has set a new record for the market at $806 per SqFt. Make no mistake, this is a hot market and if you low ball on an excellent home in a quiet street all you will hit a wall.

There were 25 closed sales across the first quarter of 2020, which represents a near 50% increase from the year before when there were 17 sales. The average sold price was $497 per sqft, a marginal increase over the 2019 figures of $487 per sqft. At the time of this report (the beginning of April 2020) there are only 8 pending sales left to close and 59 active listings. With a definitive slow down in possible sales (due to the limited ability for us Grove agents to show property) we are also experiencing the same limiting factor to list properties too! This stale mate scenario I don’t believe will cause any crash merely a delay in the system. The system right now is in the words of economist Paul Krugman in ‘an induced Coma’. I personally am not seeing a lack of desire for Coconut Grove homes from buyers, merely the lack of ability to execute. The necessity remains the same. I foresee that once the market does ‘open again’ we will see a flurry of new listings balanced with an equal number of anxious buyers looking to snap those homes up. What will most likely happen though is that we wont see any ‘crazy record breaking prices’, more of a balanced discretionary purchase with the best homes achieving $500 per sqft, which is more inline with the upper-mid range of previous achieved sales in Q1 (The top homes selling were at $550 per sqft or above).

At the David Siddons Group we are still engaging with clients on a daily calls on this market and are struggling to find new product for our clients. If you are a seller in this market between $1.5m and $2.5m: WE ABSOLUTELY WANT TO HEAR FROM YOU! Please call me and I will give you details of what our current buyers are looking for.

CLICK HERE TO SEE ACTIVE LISTINGS BETWEEN $1M-$2M

GLENCOE COCONUT GROVE The David Siddons Group sold 3531 E Glencoe St for $1,625,000 or $807 per SF. This property sold in 2.5 weeks for one of the highest sales price per SF ever achieved for a Coconut Grove Dry Lot Home

CORAL GABLES HOMES BELOW $2M

CLICK TO VIEW MORE Coral Gables Homes up to $1M Coral Gables is a much bigger animal than Coconut Grove and if you watch my Coral Gables Report videos you will see how we breakdown this complex market into 6 geographical sections. Regardless Coral Gables is home to the best private schools in South Florida and its wealth as a city is unsurpassed. The ‘City Beautiful’ has gained solid appreciation over the last year as relocating buyers flock into this market. With building and zoning law more strict, the benefits of sidewalks and a well funded police, ambulance and fire service not to mention bigger lots than you typically see in the Grove you can appreciate why this neighborhood has appreciated and will remain hot through 2020.

We recorded 52 sales in the last 3 months, which is roughly the same as the 50 sales that happened in Q1 2019, the big difference is that the $ per sqft achieved least year to this year is absolutely up. The peak dollar per SF achieved in Q1 of 2020 was a staggering $661 per SF and with 25 homes achieving over $400 per SF. The highest dollar per SF achieved in Q1 of 2019 was $612 per SF, and only 13 homes achieved over $400 per SF. (The average was $355 per SF).

With an average of 17 sales per month and 113 Active listings as of the beginning of April we have just 6.6 months of inventory.

In the grand scheme of things this is not particularly high and the market could comfortably handle the slow down. With that said, buyers may be understandably more wary of paying a top end price per sqft (anything over $600 per sqft). As yet are currently still experiencing activity – even in the light of social distancing. Between 15 March and the end of March we saw 7 homes go pending and 14 close. We at DSG are still getting engaging with clients on a daily calls on this market and are struggling to find new product for our clients needs. If you are a seller in this market: WE ABSOLUTELY WANT TO HEAR FROM YOU! Please call me and I will give you details of what our current buyers are looking for.

CLICK HERE TO SEE ACTIVE LISTINGS UP TILL $1M

CLICK TO VIEW MORE Coral Gables Homes between $1M – $2M This ‘hot’ submarket has 9.7 months of inventory (34 sales over 3 months against 111 listings). 29 Of the current 111 listings are asking over $550 per sqft. With just three sales in the last 90 days that achieved over $550 per SF sellers have to be careful not to over reach, especially in these uncertain times. The average price per sqft is $426.

How does this compare to last year? 2020 saw a 50% jump in the number of sales. There were 23 sales in the Gables between $1M-$2M in Q1 2019. The highest dollar per Sqft achieved in Q1 2019 was $718 per sqft, but this was a waterfront teardown in Gables by the Sea. 15 Homes achieved over $400 per SF, yet in 2020 22 (of the 34) home sold achieved $400 per sqft or more (More than double the amount). The average price per sqft was $459. The takeaway is that once again this sub-market performance of sales more than doubled from 2019 to 2020, yet there is no doubt a ceiling to this market and this ceiling seems to have been reached.

Once again, we at DSG are still getting engaging with clients on a daily calls on this market and are struggling to find new product for our clients. If you are a seller in this market between $1.5m and $2.5m: WE ABSOLUTELY WANT TO HEAR FROM YOU! Please call me and I will give you details of what our current buyers are looking for.

If you do step over $2m and are searching for a home in the $2-3 million range then the room to negotiate more heavily opens up, but do not consider these primary markets open to low low ball offers, if you consider pre-Covid 19 prices and post-Covid 19 prices you might if fortunate gain an extra 5% of negotiation but little more than that – of course this is our opinion as of March the 1st.

CLICK HERE TO SEE ACTIVE LISTINGS BETWEEN $1M-$2M

SURFSIDE AND BAL HARBOUR CONDOS $5M+

CLICK TO VIEW MORE Surfside and Bal Harbour Condos $5M+ Surfside and Bal Harbour are certainly the hottest neighborhoods for buyers of luxury condos in Miami. This accolade previously was held by South of Fifth. In Q4 of 2019 and Q1 of 2020 17 condos sold in the $5M+ range. From these 17 condos, 9 were sold in 2020.

Also from these 17 more than 50% happened in Surfside and Bal Harbour (6 sold in Surfside, 3 in Bal Harbour).This does not account for developer sales at the Surf Club Four Seasons Residences. This is significantly more than other notable luxury neighborhoods such as Miami Beach, Key Biscayne or South of Fifth.

In the first Q1 2020 and last Q of 2019 there were 9 sales at the Surf Club Four Seasons Residences, Oceana and St Regis – which are the buildings that rule supreme in this market. In the same period one year prior there were 7 in total of which 6 in the first quarter of 2019. To understand this market better you will gain an enormous amount of insight by reading Part 3 of this report which covers the ‘best 10 luxury Condos’. What is possibly most interesting is that while other neighborhoods saw gradual drops in their neighborhood $ per sqft, Surfside and Bal Harbour combined took a big hit in 2016 dropping down from $1800 per sqft to $1200 per sqft only to climb back up to $1802 per sqft in 2020, nearly matching their previous all time high of 2015. That is not something you can say about the other top neighborhoods like South of Fifth which is performing 10% behind , Miami Beach performing 15% behind, Key Biscayne performing 20% behind, or the rest of the luxury market which is also blending out at 10% behind the all time high of 2015. This trend will most definitely continue and widen as we move through the rest of the year.

Although Surfside and Bal Harbour really are the focus for luxury condo purchases in Miami at the moment and even though they command the highest price per SF in sales, (followed by South of Fifth), many purchases in this market are made out of desire rather than necessity – becoming second homes for many buyers. The good news is that with a solid amount of inventory and a range of units that are high quality yet highly negotiable there will be deals to be had. More importantly the quality of this neighborhood remains high yet with 30 months of inventory in Surfside and 40 months in Bal Harbour it is still very much a buyers market and this could only increase in the current climate. Please call me directly to discuss your specific needs.

CLICK HERE TO SEE ACTIVE LISTINGS OF 5M+ IN SURFSIDE

CLICK HERE TO SEE ACTIVE LISTINGS OF 5M+ IN BAL HARBOUR

OCEANA BAL HARBOUR The David Siddons Group sold Unit 1701 at Oceana Bal Harbour (Co-Listed by Dina Goldentayer) for $8,475,000 or $2,025 per SF. This unit achieved the highest resale price per SF in the history of the building and sold in the record marketing time of 88 days

WATERFRONT HOMES ON MIAMI BEACH AND THE ISLANDS $10M+

CLICK TO VIEW MORE Waterfront Homes on Miami Beach and the Islands $10M+ Miami Beach waterfront homes have had an incredible run through 2019 with 23 sales over $10M ,which is an all time record. In 2018 there were 14 sales over $10M, so 2019 saw a 65% increase in sales. With that said it is important to recognize that only 8 of the 23 sold properties sold over $2,000 per SF. I think that given the change in the economy we predict some serious slow down in this market. In Q1 2020, we have seen only 2 sales so far while there are 70 current listings, which translates into a 8 years inventory.

Of these 70 listings, 41 are asking over $2,000 per sqft. So Miami Beach waterfront homes for sale were a hot market in 2019, which could well now become very overheated with so much highly priced product.

Across the rest of Miami we are starting to get emails on some very significant waterfront estates price reductions. You can probably expect to see this increase over the next couple of months. Expect some pretty stunning deals to come out in the next weeks and the David Siddons Group will be here to keep you informed. If you as a buyer fall into this category, please do call me directly at: 305 508 0899.

CLICK HERE TO SEE ACTIVE LISTINGS OF $10M+

19 PALM AVENUE MIAMI BEACH 19 Palm Ave in Miami Beach. This brand new 2019 construction on Palm Island is listed for $22,500,000 or $2,354 per SF. (Courtesy of Dina Goldentayer, Douglas Elliman Real Estate). Contact the David Siddons Group for more information

PONCE DAVIS AND NORTH PINECREST HOMES $3M-$5M

CLICK TO VIEW MORE

Ponce Davis and North Pinecrest Homes $3M-$5M So if you are a relocating buyer or even a local buyer with a budget between $3M to $5M, then this is the part of this report that will interest you the most. If your focus is on buying a non waterfront house between $3M – $5M in Miami, then the area of Ponce Davis, North Pinecrest and South Gables area will offer up the best choice. It simply put is the number one choice for Miami house buyers in the $3-$5m range. In the last 6 months there have been a total of 29 home sales between $3M and $5M across the whole of Miami Dade. Almost 50% of these (14 out of the 29) have occurred in the Ponce Davis and Pinecrest neighborhood. If you look back a year before there were 10 sales at this price point for the same area.

Why is this area so desirable and how it achieve such a jump in sales? Simply put the legitimate demand increased with relocations COUPLED with the release of better product – we saw a number of new homes that were finished and came to the market. For those who are relocating and don’t know the market: the best private schools in Miami-Dade exist in this area or close to it and with so many tax relocations this has become the engine for this market. Additionally the lots are the largest you will find in any of the analyzed Miami neighborhood – almost all coming in between 1/2 acre to an Acre. Furthermore you will also find here the largest array of single family gated communities. Watch our video tour of the best gated communities in Miami and you will find almost all of them here.

The price per SF blends out around $490 per SF. This market admittedly holds a lot of inventory; currently there are 49 homes for sale between $3M and $5M and although the velocity of sales has been decent it is not pushing the envelope in terms of record sales or price per SF cost compared to other neighborhoods like Miami Beach, Coral Gables or Key Biscayne. Bear in mind that those in gated communities will do better.

This market as mentioned is much like the other markets of the Grove or Gables being driven by the fundamental necessity of relocating families. Do not necessarily expect the ‘wheels to fall off’ this market. Do however recognize that much like other well performing neighborhoods that although the markets wont go into free fall their previous all time peaks have most likely been reached. One possible economic effect that could play out is that real estate sales prices in NYC, New Jersey and Connecticut. If these markets do suffer and sales slow down, then this could have a knock on effect on the ability for those relocation buyers to actually have the liquidity to buy in Miami, as the proposition of holding two homes becomes less appetizing.

CLICK HERE TO SEE ACTIVE LISTINGS BETWEEN $3M-$5M IN PONCE DAVIS

CLICK HERE TO SEE ACTIVE LISTINGS BETWEEN $3M-$5M IN PINECREST

PART 2: THE 5 BEST MIAMI NEIGHBORHOODS FOR GREAT DEALS FIVE SUBMARKETS OF MIAMI THAT SHOW WEAKENED PERFORMANCE ALLOWING FOR OPPORTUNITY!

The Q1 2020 Miami Real Estate Report

INTRODUCTION Welcome to Part 2 in our 8 Park Series of the ‘Q1 2020 Miami Real Estate Report and Forecast.’ This blog addresses the neighborhood sub-markets that have not only weakened in terms of: a dropping dollar per sqft sales prices, days on the market to sell or ballooning inventory, but MOST IMPORTANTLY are fundamentally desirable neighborhoods to live in! With other words these are the 5 best Miami neighborhoods for great deals. It is often hard to get deals in markets that are very strong – and jumping on the bandwagon with everyone else with yield the same results as everyone else. We sometimes forget that very strong performing neighborhoods already have their financial upside baked into the price. If you want to vulture a really good deal you need to bet against the market and be the minority not the majority. As Mr Warren Buffet philosophy of “When others are fearful be bold and one others are bold be fearful”. This does not mean you have to act with total market recklessness and buy in markets that are undesirable, it means finding deals in fundamentally good buildings in soft markets that will come back strong.

With the highest amount of inventory or the biggest drop of price per SqFt off their previous peak sales figures (most commonly seen in 2015) these neighborhood submarkets are in a weakened state economically. If they are a good buy pre-Corona you can imagine the opportunities that will exist after! Much as the lion will focus on the weakest pray to take down, so buyers and investors can focus on these areas too. This does not mean there won’t be opportunity elsewhere, but it is a good start. Understanding our analytics dashboard will help you move into other areas and show you how to identify not just those areas, but specific properties too. Consider this a master class for ‘digging up real estate gold‘.

CLICK TO VIEW MORE Brickell Condos $1M-$2M Supply demand performance: There were just 22 sales in the period between Oct 1st 2019 and March 31st 2020. As of 1st April 2020 there were 232 current active listing. What does this actually mean? It means just an average of 3.6 sales per month in a market of over 200 listings. Simply put this is a very weak market that hugely favors buyers. Inventory is at 63 months which means that it will take just over 5 years to sell all the units currently listed in the current market at the current speed (absorption rate is 3.6 sales per month).

The entire market shows an inventory of 54 months for that neighborhood (as shown on below screen shots) but specifically within this price range we see much more at 63 months, which gives us more options to choose from relative to the sales. The conclusion is that sellers will certainly be feeling the pinch of the current market and this can only increase.

BRICKELL CONDOS $1M-$2M

What sold of recent? 3 bedroom units are the most likely to sell at this price point. Sales at: Jade, Carbonell, SLS Lux, Bristol and Asia have been the top choice sales.

Price per SF Costs for units and the story so far: It is useful to know how the price per SF in the Brickell condo market between $1M and $2M has moved and changed over the entire economic cycle. As we look poised to drop into the beginning of a new era of the economy, reflecting back on the last 12 years can be supremely useful. We know there were 22 sales in the last 6 months, exactly one year before we saw 17 for the same period, but this does not tell us enough. As per the first table below we can see the previous bottom of this market was 2010 at $491 per sqft. It rose to a peak in 2015 then dropped and stabilized in 2017, 2018, 2019 between $630 and $640 per SF. In 2020 we saw a sudden jump to $711 per SF, but this could be an exception with the few sales coming from bigger units in well-recognized buildings such as Asia, Bristol Tower and Jade. Aside from the dollar per sqft movements, the velocity of sales in the market also tells a story. If you look on the top right corner of the screen on the first dashboard screenshot you will see how the peak of sales occurred in 2013 where there was 89 sales of Condos between $1m – $2m, this dropped to a lowest point of 41 sales in 2016, it then interestingly rose again as prices dropped. What do I take away from this? Buyers like Brickell – at the right price. Its a great, vibrant and developed neighborhood to live with a good number of very appealing condos, great restaurants and better shopping and entertainment than ever before, and it is certainly not going out of vogue. Given the patterns over the last 12 years where can we expect to step back to?

Forecasting and identifying the deals: The ultimate question of any buyer is; “How do I identify a good deal?”. In my experiences its going to work best to first identify the Condo / Condo unit you like then allow us to help you work backwards through the economic cycle performance of that Building or even that line in the building to a point in time that we think could be the new ‘bottom of the market’. We will factor in current inventory, the % discounts achieved historically and even the $ per sqft in relation to the peak and trough of not just the building but of the neighborhood market it sits in. This is ALL now possible with our advanced Condo dashboard as seen below. In part 4 of the report we discuss the best condos to vulture a deal in and this will include a number of Condos in Brickell – so make sure you read that section too!

When it comes to your search it is also worth mentioning that with pressure in the economy we could well see Condo product that has previously been sitting comfortably in the $2-2.5m range (big units and units at elite Condos like Four Seasons) coming into the $1-2m range.

CLICK HERE TO SEE ACTIVE LISTINGS BETWEEN $1M-$2M

What to buy?

Brickell Flatiron, SLS and Reach hold the most inventory, which makes them the most susceptible to low offers. It seems buyers have recognized this market as one ripe for deals and when they come up they are getting grabbed. Negotiations have ranged from as much as 12% down to 4%. The median is 7% to 8% discount. With an average of 286 active days on the market we are going to be seeing some increasingly motivated or desperate sellers in the next few months.

If you want to vulture a deal at the lowest price per SF then Villa Regina, The Palace and Brickell East are worth looking at. However be aware of inflated maintenance fees or assessments. If you want a new generation building built post 2010 then 1010 Brickell or Brickell Heights West are going to be the best options. Interestingly 1010 Brickell also has the units with the highest average days on the market coming in at 433 at the time this report was generated as well as a whopping 98 months of inventory!

ASIA BRICKELL This unit at Asia on Brickell Key was listed for $1,990,000 and sold for $1,650,000. A 17% discount on a unit in a very desired and financially healthy Brickell condo!

EDGEWATER CONDOS BELOW $1M

CLICK TO VIEW MORE Edgewater Condos Below $1M Supply Demand Performance. As of the 1st April we have on recorded 500 active listings through the MLS. A total of 113 closed sales in the last 6 months, and 112 Sales in the same period one year before. With the current stats we calculate an inventory of 27 months, this means that if the current inventory remains static it would take us close to 2 years 3 months to sell all the units. The entire Edgewater market across all price points show 55 months of inventory. In short a balanced market would be around 6-9 months, so we are well are truly in a buyers market. Also do not forget that Edgewater is part of the same system that we refer to as the ‘Urban Core’ which includes Downtown and Brickell and these markets also have the same systematic characteristics of high levels of inventory within the $0-$1000,000.

What sold of recent? From the 113 sales in the last 6 months, 55 of them were 2 beds, 49 were 1 bed units or studios, 9 were 3 beds.

If you drill down into the newer buildings built post 2015: One Paraiso, Paraiso Bayview, Biscayne Bay, Icon Bay and Aria on the Bay, these blend out at $463 per sqft, everything else that is older and blends out at $320 per sqft sold.

Price per SF Costs for units and the story so far. This market is highly affordable with the average sale price being $368 per SF, as mentioned above the newer Condos (post 2015) sold higher at $463 per sqft and everything older sold out on average at $320 per sqft. These prices have remained stable over 2019 and Q1 2020 and they are up from 2018 ($360 per SF) and 2017 ($350 per SF).

This low starting point has made it good value over the rest of the urban core: Downtown which is around $350 per SF in 2019/Q1 2020 and Brickell at $390 per SF in 2019/Q1 2020.

The appeal of Edgewater is a fast growing neighborhood with unbelievably breathtaking views over the inter-coastal waterways.

Combined with absurdly easy access to Miami’s food and shopping meccas: Wynwood and the Design District. The actually velocity of sales has increased over the last couple of years, so the appeal of the neighborhood is definitely there and it has most likely stolen purchase traffic away from downtown, which saw not only a drop in sales but a drop in prices per SF, resulting in Edgewater over taking Downtown. With 257 sales last year, sales was up from the year before with 218 sales and up from the year before that with 180 sales.

Forecasting and identifying the deals: So once again: “How do I identify a good deal?”. Factoring in current inventory, the % discounts achieved historically and even the $ per sqft in relation to the peak and trough of the neighborhood market it sits in. 2012 figures run at average of $328 per sqft and 2013 figures came in at $363 per sqft. With that said its important to recognize that the best buildings in Edgewater: The 3 Paraiso Condos and Biscayne Beach did not get introduced on the resale market until 2017 and these have all traded over $500 per sqft. It is important to see that if you want a newer Condo your not going to be able to run with the same numbers as the rest of the market. Allow us to give you analysis specific to the ‘New Condos of the Urban Core’ by calling me direct at: 305 508 0899 or shooting me an email: David@siddonsgroup.com.

CLICK HERE TO SEE ACTIVE LISTINGS BELOW $1M

What to buy?

One Paraiso, Paraiso Bay and Biscayne Beach are the most desirable condos in this market. It is possible to buy in Biscayne Beach under $500 per SF and with 61 current listings in Biscayne Beach and 54 options in One Paraiso (163 months of inventory!) you will be spoilt for choice! Buildings with high inventory (besides One Paraiso) are Gran Paraiso, Aria on the Bay and Paraiso Bayviews.

Want to vulture a deal at a very low price per SF? Focus on Cite on the Bay or 1800 Biscayne Plaza where you will see listings comfortably under $300 per SF and sales at $286 per SF! GREAT DEAL ALERT: I know of a large 3 bedroom, newly finished corner unit at Biscayne Beach which will trade at a little under $900k.

CLICK TO VIEW MORE Aventura Condos Below $2M Supply Demand Performance: The Aventura condo market below $1M shows 29 months of inventory with 46 number of sales and 221 number of active listings. The Aventura condo market between $1M and $2M shows 57 months of inventory with 15 number of sales and 142 number of active listings. Clearly the higher-end of the market is a stronger buyer’s market than the lower market with room for price reductions.

AVENTURA CONDOS BELOW $2M

What Sold of Recent? In the price range below $1M we see 2 bedrooms units being sold at Marina Palms Aventura Marina, Alaqua, The Atrium and Uptown Marina Lofts. In the $1M+ range we see larger units (mostly 3 bedrooms) being sold at Prive, Echo Aventura, Peninsula II and Porto Vita South.

Price per SF Costs for units and the story so far: A very low entry point to this market at just $304 to $311 per SF (in respectively 2019 and Q1 2020) for sold properties under $1M. In this market we saw a peak in 2015 with the market touching it lowest point in 2017, which it it recovering from again in recent years. The amount of days on the market is substantial with listings in 5 of the condos in Aventura averaging over 300 days on the market!

We are seeing an average of $428 per SF for product between $1M and $2M. This price point saw a 2016 peak at $474 per SF, followed by some years with lower sales prices. The first quarter of 2020 shows a higher price again at $482 per SF, although this is simply due to sales at Prive. The amount of days on the market is substantial with listings in 5 of the condos in Aventura averaging over 300 days on the market!

Demographic Observation: This market was heavily driven by purchases in new condos from the South American market through 2014, 2015 and 2016. When the South American economies collapsed or currencies weakened these condo owners have of recent accepted lower sale prices, because their mental arithmetic has been done with their domestic currency in mind, which even at a price loss equates to gain in ‘Pesos’ or the Brazilian ‘Real’.

Forecasting and Identifying the deals: This market is still driven by a majority of second home owners from other countries and this means it will continue to offer units at suppressed prices. The $ per sqft in sales has not changed much since 2014/2015. Interestingly if you change the closed data to reflect newer buildings you see the $ per sqft pattern change drastically on closed sales. $450 is the average $ per sqft in 2019, and only went up due to 2 sales at the Condo ‘Prive’ in 2020. Not so much ‘if’ but more like ‘when’ the South American economies strengthen or the US dollar weakens these buyers could come back in force and snap up this real estate.

Marina Palms has the most amount of inventory, and the most sales in the last year for new buildings. My advice, is to focus on the new Condos like Marina Palms with great views and good services and pick up deals like never before. We already know of a couple of these, so please call me to discuss!

CLICK HERE TO SEE ACTIVE LISTINGS BELOW $2M

What to buy?

Prive, Echo and Marina Palms are the newest buildings in this market and inspiringly also achieve the highest prices per SF. Marina Palms prices have come massively off their previous achieved prices.

Back in 2015 the average sales price per SF was $619 while in 2019 this average came down to $492 per SF ($428 per SF in Q1 2020).

Both markets show several condos with very high months of inventory where there are good chances to get vulture deals. Condos like Marina Palms and the Parc are great to get deals from desperate buyers. At Marina Palms we just sold a brand new completely designer-finished 3 bedroom, 2,500 SF unit with furniture overlooking the vast body of water (inter-coastal and ocean) for just $1.42M. A little over $1.5M and you can get your own boat dock too!

The average discount off current asking prices (which is already adjusted from original to last asking price) is around 8.5%. For condos below $1M we see the discounts range between 3% and 12% with a median of 6%, while the properties of $1M to $2M range between 3% and 16% with a median of 10%.

Bellini is another example of a condo that was achieving $675 per SF back in 2016, which has now dropped to $375 per SF. With an average of 22% this building has the largest historical discount between asking prices and last listing prices. Plenty of choices even under $300 per SF at Hamptons west, Alaqua and Aventura Marina 1 being discounted heavily.

MARINA PALMS AVENTURA The David Siddons Group represented the seller in this sale. The seller understood the market is correcting and offered his unit at a very attractive price. The unit sold for $1,420,000 or $546 per SF. The lucky buyer got a completely turnkey 3 bedroom unit designed by Steven G with waterviews for less than $550 per SF!

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SUNNY ISLES CONDOS $3M+

Sunny Isles Condos $3M+ Supply Demand Performance The Sunny Isles market of $3M+ condos had 7 closed sales in the last 6 months with as of April 1st 156 active listings. That is an ENORMOUS amount of inventory and simply put at the current absorption rate of selling just over 1 unit per month it would take 11 years to sell at the inventory. There is however a large difference between the sub-markets of $3M-$5M and $5M+. The Sunny Isles condo market between $3M and $5M shows 82 months of inventory with 6 closed condos and 82 active listings. The $5M+ Sunny Isles Beach condo market shows 150+ months of inventory with 1 sold condo in the last 6 months and 6 closed sales in the total of 2019 and 75 listings.

Comparing this with other high-end condo markets we see that South of Fifth, Miami Beach and Surfside respectively show months of inventory of 70, 76 and 14 we can clearly tell that Sunny Isles Beach has more inventory than any other neighborhood in Miami.

What Sold of Recent? Jade Signature, Jade Ocean, Trump Design Tower and Turnberry Ocean Colony Price per SF Costs for units and the story so far Sunny Isles without a doubt offers the most affordable ‘beach front’ living in Miami within this price range. Not only does it provide the most affordable condos, but it is also home to the most affordable ‘new’ ocean front condos in Miami. This market was propped up again with offshore money; second and third homes that were bought during the 2015 peak. Foreign nationals who once again lost currency values, the Ruble and Real being two big offenders.

The $3M-5M market saw a 2015 peak ($1,183 per SF) after which prices dropped to $895 per SF in 2018. In 2019 the market recovered a little and went back up to $1,000+ per SF with $1,081 per SF in Q1 2020, although that was in part due to solid resales at Jade Signature with average sales in that building at $1,411 per SF. The $5M+ market saw steady prices around $1,450 per SF till the market went down in 2018 to $1,183 per SF. 2019 Saw a large sales price per SF with some strong sales at Porsche and Jade Signature. 2020 Has not recorded any sales yet.

Jade Ocean, Trump Palace, Porsche Design Tower and the Mansions at Acqualina saw the biggest discounts of 15%+ off asking price (These asking prices were likely already reduced given that properties stay on the market for an average of 240 days before being sold).

Opportunity and what to buy? An initial glance at Sunny Isles may have you thinking you should be running for the hills on this but look closer and you will see opportunity. Sunny Isles is home to a number of new Condos like the new Ritz Carlton, Turnberry Ocean and Armani. Sales have still been occurring at these buildings so to think that we have only have 7 people interested enough to buy in Sunny Isles you would be wrong. If we track back and look at 2019 there were a total of 13 sales in Condos over $3m and built in Condos constructed post 2015. Look at the average these units were sold at and you see $1306 per sqft was the average.

Regalia, Porsche and Jade Signature make up the sales in these markets for 2019 and these were selling at a discount average of 20% for Regalia, 14% for Porsche and 8% for Jade Signature. Now if you look at the time the current active listings are running up days on the market for we see averages well over 350. In the current climate we at DSG are aware of deals coming in below the discounted rates EVEN achieved in 2019: deals floating between $1100-$1200 per sqft for a very well finished unit, which is a further 1o% or more off last years already heavily negotiated sold prices. Call me and I can give you details. In short its a buyers market where buyers can get far below what these original owners paid and even back to the average 2013 prices before these high level Condos were ever delivered. A neighborhood where ultra luxury Condos exist, and where an equivalent Condo in other beach front neighborhoods can cost you 50% more.

It is also important to recognize that much like Aventura, Sunny Isles has been driven by foreign national purchases. The strong US dollar and weakened economies of those countries has pushed inventory up and sales prices down. If the dollar weakens, and it’s argued by many global economists that with so much US debt and the enormous burden of billions dollars of economic relief needed in the face of the Corona pandemic the question is not a question of ‘if’ but ‘when’ this will happen. These buyers will then arguably come roaring back into the market, re-igniting demand and pushing prices back up. Definitely one of the 5 Best Miami Neighborhoods for Great Deals!

CLICK HERE TO SEE ACTIVE LISTINGS OF $3M+

What to buy?

The highest achieving condos are Porsche, Regalia, Jade Signature and the Mansions at Acqualina. The sales jumped in 2019 on account of the big discounts, but potentially because new developer sales slowed down, which typically would drive the Sunny Isles luxury market.

You have to be careful about shadow developer inventory clouding the figures and your judgement. Truly it is hard to see value with buying developer units right now, unless you are going to parry a fair deal, in light of such big reductions on resales product. Do not get suckered into developer deals by your agent, because for the most part they are getting motivated by the bigger commission checks! Come to the developer sales office with us and armed with our analytics tables we can get you that true deal.

Take advantage of current luxury buildings holding substantial inventory that you can make multiple offers on: Jade Ocean and Porsche Design Tower being excellent examples. Trump Palace and Trump Royale are the cheapest in this market coming in the $750 – $900 per SF range. In this market there will always be exceptional deals and this will need to be analyzed on a case by case basis, so please call me to discuss.

PORSCHE SUNNY ISLES BEACH The Porsche Design Tower in Sunny Isles Beach is one of the condos best suited for vulture deals. There is a lot of inventory, units stay on the market for many days and prices are seeing some of the highest discounts in all of Miami. This unit on the 54th floor stayed on the market for almost 500 days. It was originally listed for $5.5M, then reduced to $4.4M and sold for $3,854,000

MIAMI BEACH SINGLE-FAMILY HOMES $3M-$5M

CLICK TO VIEW MORE Miami Beach Single-Family Homes $3M-$5M This sub-market in Miami Beach is one of the 5 Best Miami neighborhoods for great deals. Supply Demand Performance With just 1 sale and 2 pending deals across Miami Beach for single family homes in the $3M to $5M range you can only imagine the pinch home owners are feeling. This is definitely a different feel to the sales you see on the mainland and notably when we look south of Sunset Drive and go into Pinecrest and Ponce Davis (In these areas we see 16 sold and pending homes for the period). Why are there less sales on the Beach ? Simply put, relocations are driving the single family market and mainland Miami is where the best private schools are found. Additionally the prices per SF on the Beach are higher. For example 2535 Shelter Ave was a 5,400 SF newly built home, which sold for $4.875M (That is $907 per SF). Compare that to 7615 Ponce De Leon Rd, a newly built home which sold for $1M less, but offered 7,300 SF of adjusted living space.

CLICK HERE TO SEE ACTIVE LISTINGS BETWEEN $3M-$5M

What to buy?

If you do want or need to be on Miami Beach this is the time to take advantage and get a deal. There are an equal bunch of golf course and waterfront homes for sale as there are normal dry lot homes, so focus on these as they are in short supply on the mainland and equally expensive. Don’t be afraid to negotiate hard and use our analytics to gauge the values. Don’t look at previous sales figures, start to look under that as benchmark because home values shift downwards.

Miami Beach home buyers are now focusing on prime gated communities such as ‘Bay Point’, which is located on the other end of the 195 coming from the beach. The absorption rate here is very good with 6 sales and pending deals in the last 3 months, which gives 10 months of inventory. With 20 active listings ranging from $1.3M to $20M there are plenty of options for most budgets and solid room for appreciation. This unique single-family neighborhood still gives excellent proximity and an easy drive to the beach, but it also benefits from almost walking distance to the design district and the oh-so cool Wynwood neighborhood.

PART 3: THE 10 MOST EXPENSIVE CONDOS IN MIAMI WHAT ARE THE TOP LUXURY CONDOS BY DOLLAR PER SQFT IN MIAMI?

The Q1 2020 Miami Real Estate Report

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INTRODUCTION In part 3 of this 8 part report we address: “The 10 Most Expensive Condos in Miami”. These are the Condos that have achieved the highest figures – by virtue of asking price or sales price. Taking a look at their statistics we can see the trajectory of sales, what has sold over the last 12 months, all the way back to when the Condos were built and the Condominiums ability to hold value over an entire economic cycle. We report on what the buildings are asking today and what sold in the past.

Our dashboard analysis factors in what traditionally reports either do not or cannot calculate. A very micro view of the buildings on top of a holistic view of the Condo landscape, widening the peripheral vision of the reader and allowing macro-factors to be observed without having to water down or generalize the data at a Micro level. This is what we cover: The $ per sqft in comparison to all the other Condos in the neighborhood and total Miami market, the percentage discounts we are currently experiencing in every building AND the metric needed to recognize how ‘vulnerable’ the buildings are (months of inventory and average days on the market). In short everything you need to list right or buy right is here. With additional and personal analysis we will be able to help you target the best opportunities across the market, knowing what to offer in the face of severe economic pressure such as the Corona Virus or a recession.

These are the The 10 Most Expensive Condos In Miami (in no particular order): Apogee, Faena, 321 Ocean, Four Seasons Surf Club, Glass, Oceana Bal Harbour, Continuum, Setai, St Regis, 87 Park.

APOGEE SOUTH BEACH (SOUTH OF FIFTH)

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APOGEE SOUTH BEACH (SOUTH OF FIFTH) Apogee rises as one of the 10 most expensive condos In Miami and has been pretty impressive from 2009 when it was really first introduced into Miami’s South of Fifth market. Starting at $1,248 per SF jumping up 7-20% in value every year all the way up from 2015 to $2,578 SF, only to drop in 2016 and 2017 but regain ground to $2,749 per SF in 2018. Two sales were recorded in 2019 averaging $2528 per sqft – one in Feb and the next in May, no recorded sales since. Yes, it is extremely boutique, with Fort Knox style security, but it does not even sit directly on the sand. Regardless the quality of the building, the security, excellent floor plans and wrap-around glass view have ensured this condo stays in vogue, yet with a lot of fierce competition from Surfside Condos and an average current asking of $2900 per sqft I predict this building will experience a slow down unless asking prices comes down much closer to $2500 per sqft.

Since January 2019 the units sold did so within an average discount of 4% off their asking price. What does this mean to a seller?

If you are not priced right to start you are really unlikely to sell, because the units that actually did manage to sell were priced fairly aggressively to start with (5% or less of their achieved sales price). Historically over the entire economic cycle this figure was more like 9%. 394 days is the average count for days on the market for condos currently listed – historically units sell faster than this with an average of 227 days on the market before selling. My takeaway from this – Sellers need to be more realistic given the new current market conditions, and buyers need to make sure they are getting their units under 2019 figures.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

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FAENA MIAMI BEACH

FAENA MIAMI BEACH

In 2017 Faena took the top spot as the most expensive building (in price per SF) sold in Miami averaging $2,698 per SF. 2 Years later that number dropped to $2,140 per SF based off 2 sales recorded that year! Faena still offers an unbelievable array of services including a number of well-known restaurants like ‘Poa’, but the Miami Beach neighborhood is no longer considered the prime place to be for luxury condos that honor goes to Surfside. Today it asks an average of $2,800 per SF with an average unit price of $11.4M Since January 2019 sold units have on average been discounted 12% off their list price and with an average of only 97 days on market before these units sold. Currently that figure is much higher – 330 days is the average we see right now for active listings, which suggests a number of overpriced listings not hitting the mark.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

321 OCEAN SOUTH BEACH (SOUTH OF FIFTH)

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321 OCEAN SOUTH BEACH (SOUTH OF FIFTH) The most luxurious boutique beachfront condo on South of Fifth. If this is your criteria priority then this could be the condo for you.

As is the nature of boutique condos (much like Glass, another South of Fifth boutique condo in South of Fifth) we are dealing with a rather limited data set of one sale per year. What is rather interesting is the 14% discount percentage of sale price from asking for the sales over the last 3 years of recorded data. This is ultimately high, reflecting on the fact that sellers have been over reaching on their asking price, or have been less motivated. More likely, because they have had a unique product they have had little to gauge their initial listing price. Ultimately a desirable building, but one that has not been able to break the $2,000 per SF marker achieved in the last 2 years by other more ‘full service’ condos in better locations.

Since January 2019 these units have shown a historic discount on their sales price of 14.5% and 269 days is the current average count for days on the market for this condo (the average over the years is 254 days).

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

321 OCEAN SOUTH BEACH This unit at 321 Ocean sold for $5,750,000 or $1,965 per SF in Q1 of 2020

THE SURF CLUB FOUR SEASONS RESIDENCES SURFSIDE

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THE SURF CLUB FOUR SEASONS RESIDENCES SURFSIDE The Surf Club residences belong to the 10 most expensive condos In Miami.You always know you are going to get a high standard with Four Seasons and this building does not disappoint. Its introduction into Surfside has a lot to do with why today Surfside is the neighborhood with the highest sales price per SF in Miami. We work closely with the developer and there is a few units off market that we are privy to, so please call us if this condo is of interest. It definitely is the most expensive condo for Surfside commanding well over $2,000 per SF. Since January 2019 the units sold were on the market for on average 259 days, a slight increase off the historic figure 197 days. There are as of the beginning of April 10 units for sale. This is not a huge amount considering the scale of the project (compare that to Oceana Bal Harbour). There have been 12 sales since Jan 2019 on record but we know of many more closed deals that happened through the developer. This Condo remains a high priority focus for buyers, no doubt on account of the Four Seasons name.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

GLASS SOUTH BEACH (SOUTH OF FIFTH)

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GLASS SOUTH BEACH (SOUTH OF FIFTH) This boutique South of Fifth condo is a tricky one to analyze on account that there are so few sales recorded and few listings, unsurprising really given that this is a building with just 18 units total. The last recorded sale was in 2019 at $2,213 per SF, which came at a 6.67% discount off asking. Current asking blends at $2,384 per SF. There are 4 current listings and 25 months of inventory according to velocity of sales.

Since January 2019 the one sale as mentioned above – sold in record time – being on the market for just 14 days. This may be in part due to the fact that it was the 15th floor which is right at the top. Historically days on the market before selling was 101 days and average discount on the listing price: 5%. Currently the 4 units for sale average 279 days on the market. The best chance we have to analyse this is to cross analyse with other boutique Condos like: 321 Ocean, Apogee, Beach house 8 as well as perhaps the new Arte in Surfside (see my most recent Vlog on this Condo)

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

GLASS SOUTH BEACH Glass on 120 Ocean Dr. is one of Miami’s most exclusive condos. The pictured unit sold for $2,213 per SF ($7.5M)

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OCEANA BAL HARBOUR

OCEANA BAL HARBOUR

Oceana has achieved the highest price per SF for a Bal Harbour condo in the last 6 months at $2,025 per SF. Specifically the David Siddons Group are responsible for this sales as we were the listing agents. This Condo comprises of two towers – North and South.

As you might imagine the outer corner units are the most desirable in both Towers (01 line). It is important to recognize that over the 16th floor you clear the building to the left and right.

Since January 2019 there have been 10 sold units with an average discount off their asking prices of 11%. 240 days is the current average count for days on the market for units (the average days on the market for sold units historically was 231 days). Oceana has seen a very very solid number of sales since 2019 – 11 sales in total and the sheer number of sales is a reflection of the perceived superiority and quality of what is considered ‘The Best Condo in Bal Harbour’.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

CONTINUUM SOUTH TOWER SOUTH BEACH (SOUTH OF FIFTH)

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CONTINUUM SOUTH TOWER SOUTH BEACH (SOUTH OF FIFTH) Continuum is a building that since conception has maintained a standing in the Top 10 Condos in Miami, both for list price and for sales. Other condos have come and gone but Continuum remains firm. A lot of this has to do with the fact that it geographically sits in South of fifth on the tip of South Point, and no other building can or ever will be able to match this location. The 12 acres lot is also the biggest of any condo project in South Florida. The South Tower commands the higher prices and if you can get into a high floor in these lines: The 03, 04, 05 ( or a combined unit from these 3 floor plans which does exist!) you can enjoy the most premium views in South of Fifth with 270 degrees of water view. The amenities are truly top level and more extensive than any other condo: gym, multiple pools, spa, tennis courts and restaurants. This is resort living.

Since January 2019 those units sold have shown a discount off their asking price of 8%. 183 days is the current average count for days on the market for active listings in this condo (the average for the years before on units sold was 176 days – so we are historically moving slower than what is typical).

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

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THE SETAI SOUTH BEACH

THE SETAI SOUTH BEACH

2014 Was the year for Setai where it took the top spot for the most expensive price per SF building based off closed sales, achieving $2,885 per SF. Today the Setai, although still being a highly desirable condo/hotel, is starting to feel dated and much like other South Beach condos does not have the same geographical allure as it used to: Surfside and South of Fifth take first and second choice for location above South Beach.

Although the current asking price per SF is averaging at $2,700, it is achieving much less. In 2018 the sales achieved an average of $2,295 per SF dropping to $1,669 per SF in 2019. This can explain why sales have been few and far between and with 26 current listings the current slow rate of sales equates to 157 months of inventory! This is massive. Simply put, a large number of the current listings are reaching way above what is achievable to sell. The average days on the market for current listings is 365 while the average time it took to close listings was 232 days! Sales in 2019 have been at a 22% discount, which is the 3rd biggest discount of any condo in Miami.

My advice for buyers is offer accordingly and if necessary wait for these overpriced units to come down from the lofty $2,700 per sqft they are on average asking. For sellers recognize that there is a ton of choice out there and if you really want to move your unit recognize that buyers don’t care what you paid, they care what the unit is worth in today’s market.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

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ST REGIS BAL HARBOUR

ST REGIS BAL HARBOUR St Regis today retains a solid velocity of sales and belongs to the 10 most expensive condos in Miami. With an average current asking of $2,500 per SF yet $1,671 per SqFt being the sold $ per sqft achieved in 2019 there is definitely going to be some solid room for negotiation with the current inventory (40 Months of inventory and 13 active listings means buyers have some good options) in what is a very desirable condo. How much are we seeing on discounts? Since January 2019 we have seen average discounts of 17% off asking price based on closed sales and units stay on the market for 330 days (218 historically and 330 days since Jan 1 2019). David Siddons will be closing on unit 1102 in May at a record low. Please call me to get the details on what superb deal we got for that buyer and how we achieved it!

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

EIGHTY SEVEN PARK MIAMI BEACH

EIGHTY SEVEN PARK MIAMI BEACH Eighty Seven Park’s unique position as a condo with views to the south over a park (Think a tropical Central park), Ocean views and inter-coastal view – ALL at the same time! This makes this condo one-of-a-kind. Renzo Piano’s vision has now come to life and this boutique condo understandably is setting the marker as one of the most expensive buildings in the whole of Miami. It is the units to the south side of the building that are the unique play. This is a boutique building and there are only a couple of units currently available (some are not listed on the mls) – please call me for the inventory. Expect more resales in the future, but for now with its closing having only started at the beginning of January you will have to wait to see resales come up. Few buildings will make the hairs stand up on the back of your neck with their sheer beauty, this is one of them.

87 Park doesn’t have much data yet as it was just released. Therefore we show you the data which we have so far. The average listing price per SF in the condo is $2,490. Beware that for smaller 1 or 2 bedrooms the prices stay below $1,850 per SF. The bigger units – 3,4 and 5 beds with Ocean view and notably South views over the park expect to pay over $2500 per sqft. The David Siddons Group sold one of the largest units in the building which was a combined floor with full East, South and West views.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD IN THIS CONDO?

87 PARK MIAMI BEACH Eighty Seven Park in Miami Beach. This 4 bedroom unit is currently listed for $9.9M. Listing courtesy of Joyce Gato (Douglas Elliman Real Estate).

The most expensive deal in the 66-unit building so far was a $15.4M deal for which the David Siddons Group brought the buyer. Contact us for more information about this unit or any other units for sale!

PART 4: THE 10 BEST MIAMI CONDOS FOR GREAT DEALS 10 CONDOS IN MIAMI THAT SHOW WEAKENED PERFORMANCE ALLOWING FOR OPPORTUNITY!

The Q1 2020 Miami Real Estate Report

INTRODUCTION This blog is Part 4 of an 8 part report in the ‘Q1 2020 Miami Real Estate Report and Forecast’. In this blog we are addressing the weakest condos in Miami primed for opportunistic exploitation or condos that are actually cheaper and better value relative to their competition. These are condos that are particularly susceptible to negotiations and negative economic impact, but they are not bad quality condos. These condos are identified by having the highest number of average days on the market for their units and the biggest discounts. These buildings do not necessarily have to be cheap, they can be pricey. Much like our more macro-based blog on the weakest neighborhoods, which are also great places to live this is a ‘drill down’ one step further to specific condos that are good condos.

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MURANO GRANDE SOUTH BEACH

MURANO GRANDE SOUTH BEACH

The Back Story: Built in 2003, Murano Grande is a 40-story, 170-unit building. Back in the day, Murano Grande was one of the two best condos in South of Fifth. Sitting on the bay right over the Marina, it provides incredible west views over the bay back towards Brickell and Downtown as well as east views of the Ocean. It has had its lobby updated over the years and still today offers an excellent array of amenities and services. Units are also generous, ranging from 1,649 sqft to 4,000 sqft.

The numbers and performance: When we look through the economic cycle we saw the low point back in 2009 just after the last economic crash when the units were trading an average for $512 per sqft. It took the condo a few years to gain traction, in 2011 the numbers jumped to $558 per sqft then $659 per sqft in 2012. After this the numbers skyrocketed again, because buyers came in and remodeled units to bring them up to date with a a result that in 2015 this condo hit a peak at $1,172 per sqft. After the peak of 2015 it has now come all the way down to $595 per sqft, well below the neighborhood average of $857 per sqft. Sales have remained pretty steady since 2016, with around 12-14 sales per year.

The building currently has 33 units for sale (as of the beginning of April 2020) and 20 months of inventory. With an average asking price of $2.9M and $1,200 per SF there are going to be many corrections in order to make sales.

What lines to focus on at Murano Grande?

The 06 and 04 lines are excellent lines with great bay views. If you want a very large floor plan then an 01 line on a high floor would work best for you. The 03 line on high floors (31 to 36) is a good 3 bedroom as well with a large balcony overlooking the bay/marina and another balcony to the north. The best 2 bedroom bay-facing unit is the 08 line, because it offers more open views compared to the 10 line.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

PRIVE WILLIAMS ISLAND AVENTURA

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PRIVE WILLIAMS ISLAND AVENTURA The backstory: Williams Island has always been viewed as its own entity. Sitting in the guard gated ‘Williams Island’ in Aventura this Island has often been praised for its complete lifestyle resort, but with high running costs which relay into high maintenance fees not every buyer has been willing to pay out. The introduction of Prive on Williams Island has broken that mold by where the building has been able to opt out of that Island fees allowing for lower maintenance fees. Prive Aventura is one of the 10 Best Miami Condos for Great Deals The numbers and performance: This building is by far the most superior of any condo in Aventura, but at the same time it is also the building that has seen some of the biggest reductions in asking price, and sales occurring 30% below. It is still by far the most expensive condo in Aventura, but it is also by far the best and most beautiful. Current asking prices range from $2.3 to $8.3m. The closed sales have averaged out at 665$ per sqft. So far have there have only been 3 sales: the smaller 2 bed ’04’ line and a very large 4 bed ’05’ line.

What to focus on? The 10 Best Miami Condos for Great Deals It may be less about the unit and more about focusing on the right price per sqft. The very generous sized 3 bedroom units between 2,800 and 3,100 sqft the 03 line and 06 lines can be very appealing for buyers right now.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

GROVE AT GRAND BAY COCONUT GROVE

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GROVE AT GRAND BAY COCONUT GROVE The Back Story: When Grove at Grand Bay was launched in the Coconut Grove market back in 2016 it was being sold at almost $1,000 per sqft with the last remaining developer units fetching over $1,100 per sqft. The building has certainly not been without its flaws. For example the large columns in the living space that created the twisting element to the architecture, but with larger units on higher floors this problem becomes less contentious. At $1,000 per sqft or even around $900 per sqft it lost out to the newer Park Grove Tower 2 and One Park Grove. For $900 per sqft you get a unit at the older Grovenor House as well, but down at $780 per sqft Grove at Grand Bay can easily hold its ground and more. Grove at Grand Bay is one of the 10 Best Miami Condos for Great Deals.

The numbers and performance: With closed sales blending out a $780 per sqft, this building is closing units in the last 12 months well under every other Coconut Grove Condo built post 2000. Only the Club Residences at Park Grove and the Ritz Carlton sell cheaper, but this latter condo was built in 2001, is looking very dated now and the maintenance fees are higher at $1.29 per sqft. In short little gets close. In 2019 and 2020 the sales came with a 7.5% discount on average.

What lines and price to focus on: With 25 current listings and 150 months of inventory, not to mention an average of 254 days on the market, sellers will be motivated. Aim for higher floors and of course corner units. The South Tower, which is located just in front of the North Tower is the better play.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

GROVE AT GRAND BAY COCONUT GROVE Spectacular Penthouse at the Grove at Grand Bay residences. This full floor penthouse offers 6 bedrooms, over 10,000 SF of living space and a large rooftop with private swimming pool. Listing

by Eloy Carmenate (Douglas Elliman Real Estate). Contact us for more information about this penthouse listing.

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BRICKELL FLATIRON BRICKELL

BRICKELL FLATIRON BRICKELL The backstory: This building is the last Ugo Columbo building built. Brickell Flatiron would at any other time in the economic cycle have done well; great location, fine finishes, excellent amenities. Unfortunately, timing being what it is and now combined with the 2020 Corona virus we can expect to see further reductions and better deals to be had.

The numbers and performance: Finished in 2019 just as the newer Brickell market resales (2015 onwards) softened 10% below the 2015 resale numbers. There has only been 1 sale in flatiron and interesting against the average listing price of $776 per sqft in the building, this one sold for $546 per sqft. The current average listing price per sqft in Flatiron is $776, but with such pressure from other listings this can certainly come down. Most importantly Flatiron has the second largest number of units for sale out of any Condo in Brickell with 87 units currently for sale! Consider this a pretty huge pool of options to mine a deal from.

What lines / price point to focus on: High floor units that clear the buildings in front are ideal or units on the flatiron tip with a view down the funnel of South Miami Ave (the 01 and 02 lines).

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

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FOUR SEASONS BRICKELL

FOUR SEASONS BRICKELL

The back story: Four Seasons has always had a reputation for quality and this very much ensures the quality of service is up help.

For 10 years Four Seasons has remained the most popular building in Brickell, and you might argue that this should make it one of the strongest buildings in Brickell, but if you look closely at the price per sqft performance you can see how relatively speaking it has softened a lot. Like we said ‘weak’ does not necessarily mean undesirable or to be avoided, it means weak performance relative to historical figures.

The performance and numbers: Four Seasons Brickell had its best year in 2017 where it achieved the neighborhood high of just over $900 per sqft. In 2019 the sales price per sqft dropped to an average of $800 per sqft! You have to go back to 2013/2014 to match this figure. Sales have also slowed in recent years to just 3-4 sales per year. With 27 current listings (54 months of inventory) and the 249 average days on the market you should see motivated sellers willing to play ball. The current asking average is $1,000 per sqft, which is the 2nd highest in the neighborhood and well above market average. In truth this building stands above 90% of the buildings in the neighborhood and there is nothing generic about it.

The best lines to go for: As with most buildings go for the corners. Two bedroom units at Four Seasons are definitely different to the typical two bedroom units in Brickell. The ‘B’ and ‘C’ lines come in at around $2,100 sqft. The E and F lines are what you want if you need a bigger unit, with direct water views on either the North or East side. With 3,400-3,800 sqft these really give you a home in the sky. Definitely the cheapest Four Seasons residences in Miami.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

PORSCHE DESIGN TOWER SUNNY ISLES

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PORSCHE DESIGN TOWER SUNNY ISLES The backstory: The Porsche Design Tower definitely is one of the 10 best Miami condos for great deals. Built in 2017 this condo was introduced into the market with a huge amount of publicity, given it was the first condo tower to be branded by Porsche. The unique car lifts drew much attention and the very smooth lines of the Porsche’esque finishes was what sold many who bought from the developer. The buildings delivers 3 and 4 bed units ranging from 3,100 to 6,100 sqft.

The Performance and Numbers: Today there are 37 units for sale priced between $3.5M to $16M and we predict a number of these will now be achievable at around a 35% discount off the peak prices. We have seen a number of high priced $8 – $9M units selling for almost half the original list price.

If your budget does not stretch to Porsche also seriously consider: Trump Towers 3: Trading at around $559 per sqft (2019 data), this condo shows a large amount of inventory (35 listings as of April 11th 2020, which equates to 52 months of inventory) 191 average days on the market. It is also worth mentioning that it is currently selling as the 2nd cheapest beach front condo in the market with an average asking price of $618 per sqft.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

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ST REGIS BAL HARBOUR

The backstory: Launched in 2011, St Regis offers 282 units across 3 towers. The middle hotel tower (9703 Collins Dr), and the residence towers to the North (9705 Collins Dr) and South (9701 Collins Dr). I find the North Tower to be the preferable choice as it has the best views. It has also happened to sell the most units in the last year, with 7 sales. Although the whole project offers incredible ‘Resort’ services and amenities it is important to recognize that the North Tower and South Tower will be analyzed below separately.

You can see that the South Tower is definitely weaker than the performance of the North Tower.

This is also the ONLY condo to make our 10 most expensive condos while at the same time making the list as a ‘weakened’ condo.

It is still very much luxury and still commands a relatively high price per sqft, but due to economic and increased supply pressures from other high level condos it no longer sells at around the $2,000 per sqft it was getting in 2015. It is now 25% off that figure, and our recent sale at St Regis North comes in well below that, illustrating a weaker market, but what still is a fantastic building that poses excellent value.

ST REGIS BAL HARBOUR

The Performance and Numbers: South Tower: Peaking out at $2,074 per sqft in 2015, the prices dropped down significantly to $1,474 per sqft in 2019, then $1,186 per sqft for the one sale in 2020. 2019 Recorded 9 sales and although the price per sqft was at pretty much its lowest point since the building’s launch in 2012 the value is clearly there and the buyers recognize this. In the last year there was a substantial average discount of 13.7% on asking prices North Tower: Peaking out at $1,953 per sqft in 2016, the prices dropped down significantly to $1,439 per sqft in 2018. In 2020 the sales price per sqft has been at $1,606 per sqft for the one sale in 2020. The reason that the sales price per sqft increased was because one of the sales was a fully furnished, designer finished Lower Penthouse which traded at a huge discounted rate of $6m, 25% off from the original ticket price of $8m.

The prices and lines to go for: The 02 and 03 lines are both very attractive floor plans. Target to pay under $1,500 per sqft. Call me for specific prices achieved, which units came furnished, which did not. There are a number of finer details to consider.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

ST REGIS BAL HARBOUR One of the most luxurious condos, but also one that allows for great deals as proven by our most recent deal. Unit 1102 sold for $4.1M after being listed for $4.85M; a 15% discount.

The David Siddons Group brought the buyer for this deal, which marks one of the lowest sales prices per SF in the history of the condo.

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CAPRI SOUTH BEACH

CAPRI SOUTH BEACH

The backstory: Capri was launched into the South Beach Market back in 2008, sales recorded from 2010 onwards. This is a boutique condo that flew pretty much under the radar in recent years and has a number of less than familiar benefits. You can live and walk to the shops and restaurants on Purdey Ave in Sunset Harbour. The building sits on a quiet section off West Avenue, with superb bay view. Factor in the fact that this building has its own Marina.

The performance and numbers: Through 2015, 2016 and 2017, units sold comfortably over $1000 per year ft. Last year units sold around $800 per sqft and in 2020 we will see them sell between $600 – $700 per sqft.

What to buy? Right now units 403 AND 1105 are the best two plays. Boat slips can be available for both these units. Please call me for details and viewings.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

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ONE PARAISO EDGEWATER

ONE PARAISO EDGEWATER

The Back Story: One Paraiso certainly makes it to the list of one of the top 3 condos in Edgewater. Delivered in 2018 this condo along with Biscayne Beach now offers truly excellent value. This condo sits inside the Paraiso community of 3 other buildings and because of its community feel it feels more sheltered than other cheaper condos in parts of Edgewater that are ‘upcoming’ but have not ‘come up yet!’. This building is going to be ideal for those who want to be directly on the water, but do not want to or cannot pay Brickell prices.

The Performance and Numbers: Currently selling at around $590 per sqft, one should expect to see substantial discounts in asking prices (current sales have achieved an average 8% discount of the LAST asking price). You can of course see discounts from 2018 resale prices, which achieved over $700 per sqft. What may not be so obvious is the deals found on some of the bigger units, some which are being sold well over $1M less than what they were originally bought for. With 44 current listings and 132 months of inventory there is plenty of choice and plenty of room for negotiation.

The prices and lines to go for: We have seen 3 bed corner go for as little as $900,000, which is undeniably one of the cheapest 3 bedroom units you could buy with a direct water view in Miami (at least based in a new(er) building). If your budget goes higher you can get into one of the very large 3,000+ sqft, 4 bedroom penthouse units for $2M. I have a clear line of sight to the final numbers for a couple of these units so please call me for details: 305 508 0899

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

ONE PARAISO EDGEWATER Stunning southeast facing penthouse unit on the 49th floor listed for $5.7M. This 4,549 SF unit offers 6 bedrooms and is listed by Richard Goihman of Douglas Elliman

GRAND BAY RESIDENCES KEY BISCAYNE

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GRAND BAY RESIDENCES KEY BISCAYNE The backstory: The Grand Bay Residences is connected to the Ritz Carlton on Key Biscayne and thus provides an incredible array of amenities and services. With that said it lags well behind the competition; The Ocean Towers at the Ocean Club – both Tower 1 and Tower 2 and 3 as well as Oceana which sits right next door. It is in short the cheapest and lowest price per sqft of any luxury ocean front condo in Key Biscayne. This condo belongs in this list of the 10 Best Miami Condos for Great Deals.

The numbers and performance: Back in 2016 this building was achieving over $1,000 per sqft. In 2020 there were two sales so far bottoming out the dollar per sqft to just $703. Factor in that this building has shown the most significant discounts of any condo in Key Biscayne over the last 5 years of nearly 11%, the 317 average days on the market of product and 20 months of inventory and you can see the opportunity.

Also seriously consider: Towers of Key Biscayne: Trading at just $362 per sqft!! This condo shows a huge inventory (38 listings as of April 1st 2020) and a very low price per sqft. With 2020 trading figures at $362 per sqft this is the lowest it has traded since 2010!

More importantly it is the lowest of any condo on the Island of recent years. To put into perspective the blended average on the island for sales is $568 per sqft in 2020 and $638 per sqft in 2019.

WHAT IS FOR SALE RIGHT NOW?

WHAT HAS SOLD

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IF YOU WANT TO BE ABLE TO BUY A 2 BEDROOM UNIT WITH A VIEW OF THE OCEAN AND STEP ONTO THE SANDS OF A QUIET BEACH IN A MATTER OF MINUTES ALL FOR UNDER $1,000,000 THEN THIS IS THE ONE FOR YOU! CLICK TO VIEW MORE

PART 5: HOW TO READ OUR ADVANCED SOFTWARE FOR PREDICTIVE ANALYTICS OUR ADVANCED ANALYTICAL TOOLS

The Q1 2020 Miami Real Estate Report

INTRODUCTION Welcome to Part 5 of the Q1 2020 Miami Real Estate Report. In this section we explore the tools that myself and my team use to ‘Help Clients make better decisions’. We reveal the metrics used in this report to make the narrative and conclusions over what is happening and why it is happening.

Now more than ever we need optics to understand what is going on and what could potentially happen in our real estate markets. The stock Market, Covid-19, interest rates; these all play macro roles in our real estate economy, but they are not the only forces at play. In part 6 we will explore the macro influences as well as the micro influences at play in 2020. However, please know that when we are reading and analyzing the Miami markets we are using tools that help us paint a more complete picture.

I have been studying and reporting on the Miami Real Estate market for over a decade now. Ever since my first report on Brickell in 2010 I have been searching for better ways to read the markets and thanks to technology I have not only been able to write on the market, but to create analytical tools and software in the form of dashboards to tell clients (both buyers and sellers) what is going on. As Warren Buffett so accurately put it…

“If you can’t read the scoreboard. You don’t know the score.

If you don’t know the score, you can’t tell the winners from the losers.”

So here are the tools I have used in my Q1 report to help understand the markets and once you see them too you also will be able to understand the markets better!

THE NEHS OR NEIGHBORHOOD ECONOMIC HEALTH SCORE

THE NEHS OR NEIGHBORHOOD ECONOMIC HEALTH SCORE To better understand the neighborhood of your choice we offer the Economic Health Score Indicator on our “Live Analytics” page.

This neighborhood health score indicates the current economic health of an area and its likelihood to fall ill or to be susceptible to illnesses. With other words: This is a score to gauge how healthy or weak a market is. So this score does not predict the future, it merely provides the current status of a market and provides you with an indication of the market’s defense mechanism aka: its strength to process future hits. It is not about bear or bull markets. It’s about the market’s elasticity; about robustness and resilience of the market against economic change.

VISIT OUR NEIGHBORHOOD ANALYTICS PAGE

THE ADVANCED ANALYTICS SCREENS

THE ADVANCED ANALYTICS SCREENS Our advanced analytics page offers you the possibility to see the market statistics of homes or condos in some of Miami’s most desired neighborhoods. You can choose the type of property, the neighborhood, the property style (waterfront, dry lot or new home -3 years or less), and a price range. The system will then provide you with quarterly data (going back 6 quarters or 1.5 years) on average sales price per SF, Months of Inventory, number of closed listings, number of active listings and days on market. As the graph shows the last 6 quarters it gives you a great idea of how the market has performed over time. For each of these screens David will add narrative with his day-to-day experience in this market or particular sales to provide you with a more holistic overview of the market.

VISIT OUR ADVANCED PAGES

CONDO GEEKS DASHBOARD

CONDO GEEKS DASHBOARD The Condo Geeks dashboard is by far the most advanced of the tools we have created. This is the brain child of my partners and myself to create a visual representation of the markets and specific condos. What would have previously taken hours or more likely days to analyze and format, can now be accomplished in mere seconds! This tool is not simply pulling data live from the MLS and collating it into easy to understand charts. It has been scrapped meticulously to remove anomalies as well as filling in gaps that the mls did not record through cross referencing with the Florida Tax Role. Simply put it’s much more accurate.

PART 6: THE (SOCIO) ECONOMIC AND DEMOGRAPHIC INFLUENCES IN THE MARKET EXPLAINING THE ‘WHY’ OF THE MARKET NOT JUST THE ‘WHAT’

The Q1 2020 Miami Real Estate Report

INTRODUCTION Typical real estate reports talk a lot about what is happening, but few address the social narrative of WHY it is happening. This is not one of those reports. We decided to take a good look at what has happened in the last 3 months (and in many cases 6 months) and compared it to the year before while bringing into focus the ENTIRE economic cycle since 2008. We then discussed both positive and negative influences in the market, as well as potential economic sides effects that could come about from the current climate. As I have said the ‘Why’ is just as important as the ‘What’. If you apply the below observations to the markets you can better appreciate why some markets are simply flying and others are far more static, but could change soon!

WHERE ARE WE IN THE ECONOMIC CYCLE?

THE 2020 MIAMI REAL ESTATE REPORT:

THE 2020 MIAMI REAL ESTATE REPORT: WHERE ARE WE IN THE ECONOMIC CYCLE? For many neighborhoods the peak of the market was not 2019, it was back in 2015 / 2016. This is particularly true for the condo market, where it peaked and then corrected. Some of those condo markets have dropped so significantly that it could be observed they are now getting to the low point in the economic cycle and 2020 could see the bottom before they rise again into 2021. For others (the primary single family markets of Coconut Grove and Coral Gables for example) the markets peaked in 2016 then bubbled along only to start to jump again in 2019/2020. These economic cycles look very different according to our data sets.

It’s important to recognize the clear difference in the performance across these markets. So much of this has to do with demand and supply. Below we show two markets and how different they have behaved. This is why over economic cycles homes do and have outperformed condos in appreciation

Condo cycle wave pattern (South of Fifth Market of $M0-$2M)

Home cycle wave (Coconut Grove & Coral Gables Market of $0M – $2M)

THE MONTHS OF INVENTORY – DEMAND VS SUPPLY

THE 2020 MIAMI REAL ESTATE REPORT:

THE 2020 MIAMI REAL ESTATE REPORT: THE MONTHS OF INVENTORY – DEMAND VS SUPPLY The fundamental behavior of any economic cycle is an illustration of: ‘supply vs demand’. Although this is not an influence, it is a side effect of economic behavior. This effect is ‘demand‘ on one side of the equation and rate of new construction ‘supply’ on the other side. If you focus purely on the economic influences of just ‘demand’ you are missing half of the equation. This is why so many buyers make the terrible mistake of asking questions like ‘How is the Miami market behaving?’. This is a totally erroneous question, because this throws both condos and homes into the same equation which is impossible. Many observations I hear in the field focus on buyer confidence but not developer /builder ability, and the rate of supply is very different in the condo market compared to the single-family home market. Consider this; when new homes get built, older homes have to be torn down. In landlocked ‘single family’ neighborhoods with clearly defined boundaries, you simply won’t and cannot see an increase in the actual number of homes that exist (unless zoning changes are made and lots are subdivided but this rarely happens) just the quality of those homes change and thus the price. New homes cost more than old homes pure and simple. Consider the condo market on the other hand. An old 30 unit condo is torn down, a car park is bought or old commercial office is bought then a 300 unit condo tower is erected. The supply curve totally changes! Take one look at the Brickell skyline today and compare it to 10 years ago.

New construction in the condo market has now slowed down and almost all new condos in Miami have been delivered. There are no more cranes to be seen in the skyline of Brickell or other neighborhoods, but some markets definitely have empty lots sitting and very old buildings. We know there is going to be another wave and this WILL come in the next 10 years, we just don’t know when. Take a drive through some neighborhoods and you will still see likely lots just waiting to be developed. Now drive through the single family neighborhoods of Coconut Grove or Coral Gables. Recognize that, if anything, the land available may be receding. As we observe climate change we see the appetite for buyers looking in flood zone areas receding, which means a contraction of available land and property in parts.

TAX RELOCATIONS

THE 2020 MIAMI REAL ESTATE REPORT:

The 2020 Miami Real Estate Report: A large part of Miami’s growth numbers are caused by tax migration

THE 2020 MIAMI REAL ESTATE REPORT: TAX RELOCATIONS Unless you’ve been living under a rock for the last year you will have noticed the incredible velocity of tax relocating buyers moving down to South Florida. Because of Miami’s very multicultural base and highly developed infrastructure we find that this is the No1. choice for buyers from New York, New Jersey, Connecticut, DC and even LA. Consider this equation of taxes and cost of living: A NYC condo owner that earns $3M per year decides that he/she doesn’t like paying city and state tax (10%) and decides to move to Miami. They sell their NYC apartment for $10M and buys a slightly smaller property for $6M in NYC as they would like to keep a base there for business. Given their lifestyle they would like to buy a similar property in Miami of $10M (although your dollar stretches further in Miami than in NYC and $ per sqft in luxury condos is almost 50% of NYC). They use the balance of $4M as down payment on a Miami property and mortgage the rest. A $6M mortgage equates to $25k per month – exactly what they save in taxes by relocating.

Conclusion: This NYC buyer could now own 2 properties, with a cumulative value of $16M for the same price as their initial condo.

The Miami Condo is way nicer than an equivalent Condo in NYC. They get to experience the best of both cities for the same cost. This scenario is happening every day and only grows as business also see the savings and motivations of their staff to live in South Florida.

What is driving these buyers and where are they focusing on? For mid level families it’s quality of life, single-family homes in close proximity to good private schools in the primary markets of Coconut Grove, Coral Gables and Pinecrest. No surprise then that these markets are performing so well. For the Condo buyers and empty nesters its the urban core of Brickell or the less touristic yet beach communities of Bal Harbour and Surfside followed by South of Fifth. For those with the deepest pockets: Venetian Islands, Indian Creek Island or the gated communities of Tahiti Beach and Gables Estates.

COVID-19

THE 2020 MIAMI REAL ESTATE REPORT:

Source Image: Healthdata.org

THE 2020 MIAMI REAL ESTATE REPORT: COVID-19 No one could ever see this macro influence being part of this report 6 weeks ago, I certainly did not! But here we are and this pandemic is of course a primary influence to all of the other parts of our real estate economy: Fed’s decisions, potential currency movements and EVEN THE SPEED OF RELOCATIONS. Interestingly, not all properties are being affected in the same way in Miami by Covid-19, but it is worth addressing what we are noticing: Rate of sales and Listings: Condos: With social distancing we are of course now seeing the rate of sales slowing down, particularly in the condo market where laws are currently prohibiting realtors from showing property. This slows down our sales, but lets not forget the other side of the equation: supply. In the same way that it is hard to show property it is hard to list too! Social distancing means many home owners do not want to have people coming through their condo or home for safety reasons. This means shooting photos and video is hard.

Homes: I have observed however that single family home owners have been more willing and able to allow agents and buyers into their homes as well as photographers and videographers. They also don’t have the same restrictions enforced by condo associations so video tours and virtual tours are far more easy to do. With that said we are of course seeing a drop in listings. Several reasons why, not just the fear of contagion. A seller is likely to be looking to buy another home and the prospect of listing without having somewhere to go or the ability to find a home to move to can be less than appealing.

I am predicting (as many other agents are) that when the market does open up again, we will see a flurry of new listings met with a flurry of buyers. The first week that ‘open houses’ are allowed, I foresee an absolute feeding frenzy, and even if it’s in the middle of the summer, it’s going to happen. Don’t think that waiting for the market to soften in the primary single family markets of Coconut Grove and Coral Gables is going to happen, because I doubt it will. We just don’t have enough supply. Some dialogue has been had that we can be in economic freefall with growing rates of unemployment but this is not caused by a weak economy but by a global pandemic putting THIS business in what has been classified by Economist Paul Krugman as a ‘self induced Coma’. The difference is that Miami is not NYC or any other city, it sits right now in a very very unique space. The question remains that with so much tourism in Miami and many people working in hotels, restaurants, bars, clubs how will the rental market hold up? How will rents get paid, and if they don’t get paid how do you collect rent? How long can owners go on without collecting rent? Certainly the lower end of the Condo market could be most affected as could condos that have very very high levels of rentals.

Single family owners: If you are thinking of listing and will be open to showings consider that you won’t have a lot of competition and buyers are busy online looking right now. Please call me if you are one of these people!

New Construction (single family): Consider this; there are still homes being built but a large number of job sites have been closed down by order of the city. Some of these builders are feeling the pinch and you will not see as much new product enter the market as usual, because inspectors and TCO’s time is as much an asset to builders as is cash. For some builders the appeal of having buyers take a home in a more raw state and finishing it can be highly appealing. For a buyer it can also be appealing, because it can allow spec homes to be turned in custom homes by the end user. We are dealing with a number of these situations right now and they are allowing for some excellent opportunity.

The psychological impact of Covid – 19. ‘An existentialist awakening!’

We spend so much time talking about the mathematical and statistical effect of Covid-19, but what about the psychological effect?

Miami I feel is in a very unique position right now. What I have noticed is that since the outbreak the level of buyers engaging with us through email and phone has gone UP NOT DOWN! After talking to these buyers several things have become apparent. They are a) mostly relocating families or b) buyers who have liquidity looking for opportunity. Many who have been looking to move next year have now sped up their timeline. The realization that they have not been living their best life has led many to call me and after seriously questioning their life choices have realized that when you don’t know how much ‘quantity’ of life you are given you become far more aware of the ‘quality’. Miami offers no doubt incredible quality and realizing that there are motivated sellers out there in the Condo market further stimulates the opportunity investor, but don’t think this extends to the single family sector – particularly the ‘working wealthy category of $1m – $3m and even in the $3m to $5m which is highly digestible to North Eastern buyers. We will touch this in more detail in Part 8. At this moment in time we are experiencing a very unequal balance ‘globally’ between people being negatively affected by the global economics and Covid-19 and those who are not. At the same time we also see huge amounts of liquidity still floating around.

Please compare this year’s new listings entering the market between the 15th of March and the 15th of April and compare this to these dates in previous years. We took the Coral Gables home market and the Brickell condo market to make this comparison

THE INFLUENCE OF CURRENCIES

THE 2020 MIAMI REAL ESTATE REPORT:

THE 2020 MIAMI REAL ESTATE REPORT: THE INFLUENCE OF CURRENCIES Let me take you through the journey of the last economic cycle in Miami. In 2010 we saw Miami re-emerge out of recession. Inventory was running at unprecedented levels and then units were slashed in price (by as much as 50% in some cases), absorption shot up and all the inventory was absorbed in less than 18 months as units became incredibly cheap. At the same time the dollar was not particularly strong against foreign currencies and at the same time those economies started to do well. New construction started and hungry buyers happily bought up new Miami condos with the view of renting them out when finished or having them as a second home. Of course a number of them recognized either the strength of the US economy and the dollar or more accurately the fragility of their domestic economies. Role forward to 2015 and looking forward to 2020 and two things happened: currencies moved – the $ grew in strength and real estate became too expensive for many foreign national buyers and the rental inventory started to grow beyond the rate of absorption. Take a look at the table below and imagine your position if you think and work in the Brazilian Real.

Now run through this scenario in your mind. You bought a $2m unit in Miami in 2012 when the Real to the dollar was 2: 1. You spent R$4000,000 on the property. 8 years later you sell that unit for $1500,000 making a loss of $600,000 if you factor in commissions and closing costs. Sounds unbearable right? Now, convert that $1400,000 back to Reals. You get R$7,400,000! You lost on the dollar but you nearly doubled your investment on the currency. Not so terrible now is it! With so many foreign nationals having bought properties over the last economic cycle it is no wonder why such incredible deals can emerge! The neighborhoods that were driven by non-domestic buyers like Sunny Isles, Aventura and even Brickell took the biggest hit and if you refer back to part 1-4 of this report you can see that clearly.

Now consider the single family market, which also saw foreign national buyers. Many of these were buyers who came with investment visas, student visas and eb-5 with the focus of many to relocate and many did with many still here today. However when the foreign buyers slowed down due to the currency and weakened economies of those countries, the emergence of the domestic ‘Tax Relocation’ buyers took up the slack. (mainly into the primary single-family markets although some luxury condo purchases happened too; look at Surfside and Bal Harbour).

Now let’s look forward past 2020 and consider what will happen if the US economy experiences inflation? The Feds print money to handle the cost of the $15 trillion dollar stimulus package and some of the $25 Trillion of loans held by foreign countries is recalled.

The dollar could weaken once again and this could then create a similar situation to 2010 where US real estate becomes cheap again.

As the saying goes: “History does not repeat itself but it certainly rhymes!”

GOVERNMENT TAX POLICY Under new policy for very high-end real estate transactions there are significant deductions that can be made. For 2020, if you have a large real estate portfolio ($6,875m per individual) you can make much larger tax deductions. You can depreciate an unlimited amount now – defendable against the IRS. I met with my financial advisor David Gruen CFP & ChFC who is an Estate & Business Planning specialist and asked him three questions: • • •

What happened in the new stimulus bill that will have an effect on real estate?

What is the fed doing that will have an impact on the real estate market?

Any other things you find interesting to look at?

LISTEN TO MY INTERVIEW WITH DAVID GRUEN (CFP, CHFC)

FED’S DECISIONS I spoke again with my financial advisor David Gruen on what the FED is doing that will have an affect on the real estate market?

LISTEN TO MY INTERVIEW WITH DAVID GRUEN (CFP, CHFC)

PART 7: HOW DID EVERY MIAMI NEIGHBORHOOD PERFORM IN Q1 2020?

HOW DID EVERY MIAMI NEIGHBORHOOD PERFORM IN Q1 2020?

The Q1 2020 Miami Real Estate Report

INTRODUCTION In this part (part 7) of the ‘Q1 2020 Miami Real Estate report’ we take a moment to delve into each and every single market, which means every neighborhood and every price point is covered. We ask ourselves: How did every Miami Neighborhood Perform in Q1 2020? We have also provided an overview table at the beginning to make it easier. Whether you are reading the report in full or just scanning in parts, this report is designed to be relevant to you and help you make a better decision on both buying and selling. Please bear in mind that this is really the opener to a bigger conversation, and I could have (if given the time) written pages and pages on each and every price point in each and every neighborhood! It will give you the framework of each market, but we don’t cover everything, so I would urge any reader to pick up the phone and call me: 305 508 0899.

If you are discovering this part of the full report first then please do go back and read the first 6 parts as these will also be very helpful. What I hope as a reader you do realize is that we have this incredible software that updates by the day and allows reports to work as evergreen material. So if you are reading this at the end of 2020 you will still find it highly valuable, as the software we use to generate the stats will be updating every quarter. So, let’s now dive in and understand the market movements of Q1 2020 for the Miami Real Estate Market!

COCONUT GROVE HOMES AND CONDOS IN Q1 2020

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COCONUT GROVE HOMES AND CONDOS IN Q1 2020 Single family home sales not only looked steady, but performed better than in 2019. The $0-$2M price range performed very strongly.

To read more about the strength of this price point please refer to part 1 of the report where we cite Coconut Grove as one of the strongest markets in Miami. It is worth mentioning that the townhouse market in Coconut Grove is absolutely booming. If you are a potential seller of a Grove townhome, please, please call me!

The $2m – $3m range has been a little different. Q1 2020 was a reflection of Q1 2019. The average price per sqft was $529, which pretty much replicates the year before. Days on the market for sold listings is at 90 days and current average days on the market for active is at 127 days. What does this mean? I believe that although there are fewer $2m – $3m homes available for sale in the Grove the 31 listings that are for sale have been typically sitting there for 4 months, they are becoming stagnant and are less desirable. Any new listings that really ‘hit the mark’ are not likely to stay on the market very long. The demand is there, but the quality of homes are not. No sales in the $3-$5m range for Q1. The $2m+ market is driving strongest in Coral Gables.

Visit our advanced analytics page here.

What about Coconut Grove Condos? Q1 2020 sales were pretty much on par with 2019, and with 62 months of inventory and an average 226 days on the market for active listings this spells a very weak market and generally speaking a further predicted drop in prices. The Ritz Carlton Residences has the best traction in the market right now. Park Grove Tower 3 (Club Tower) and Grove at Grand Bay are the two buildings with the slowest absorption rates, which means they should be the two buildings most suitable to vulture deals.

CORAL GABLES HOMES IN Q1 2020

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CORAL GABLES HOMES IN Q1 2020 Once again the single-family homes market of $0 – $2m is performing extremely well. Please refer to part 1 to read more about this price point in this market or visit our advanced analytics page.

The $2m – $3m range in Coral Gables has definitely performed better in 2020 than it did in 2019 with 9 sales at an average of $527 per sqft (In Q1 2019 it was 5 sales at an average of $500 per sqft). The $3-$5m range remains stable with an average $801 per sqft across the 4 sales. What is interesting is that in Q1 we saw the highest price per sqft in two years. For more information visit our advanced analytics page.

What about waterfront sales in Coral Gables? Coral Gables Waterfront homes are a focus for luxury home buyers. As of the 15th April there have been 6 sales. We have 6 pending sales over $6,000,000, 4 of these are over $15,000,000 in Coral Gables, and two of those 4 are over $40,000,000! It’s staggering to see the focus on Coral Gables waterfront homes.

KEY BISCAYNE HOMES AND CONDOS Q1 2020

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KEY BISCAYNE HOMES AND CONDOS Q1 2020 Key Biscayne condos under $1m have experienced softened prices per SF in Q1 2020 since Q1 of 2019 dropping from $515 per sqft to $481 per sqft. Sales actually increased in numbers, which is a direct reflection of no doubt the discount in prices. We also saw more sales in the $1m to $2m market. The $2m to $3m seems to be looking healthier than it has done in the last 5 quarters with 7 sales.

Inventory has also dropped to its lowest point in 2 years.

The Key Biscayne luxury condo market is driven by Oceana, Ocean Club and Grand Bay Residences. The market reached it peak in 2015 after which prices came down. These market conditions (high inventory levels, high amount of days on the market and lower prices) did result in some buyers being able to vulture great oceanfront deals. Grand Bay Residences is currently seeing a 11% discount on asking prices and is therefore a great condo to get a deal as it is trading at $703 per sqft, a figure not previously not seen since 2012. Oceana, which is the most luxurious condo on Key Biscayne is trading at its lowest point of $1,398 per sqft, a long cry from its peak of $1,795 per sqft in 2014. Ocean Club is the best performing luxury condo project for 2020. With prices also significantly off the peak, in 2020 it is trading around $844 per SF. So, what about the ‘single-family home market in Key Biscayne?’ This market has not been performing so well for the last couple of years, especially for homes in the $2m – $4m bracket. This market has been in direct competition with the Gables and because the price per sqft is so much higher (well over $600 per sqft), many buyers are opting for the bigger lots and cheaper homes of the Gables.

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PINECREST HOMES Q1 2020

PINECREST HOMES Q1 2020 The Pinecrest housing market is alive and well. 2020 Sees a continuation of 2019’s performance and as long as relocations continue to drive the market it will remain strong. With only 6.7 months of inventory under $1m, this market is a firm seller’s market. In Q1 of last year this was 8.7 months with 23 sales, as opposed to 33 sales this year. Simply put; If you are currently a seller, please call us – we are running low on inventory! Although inventory is higher for the $1-$2m market the same is to be said for the velocity of sales; there are more sales in this year than in the last year.

Once you get to the $2-3m range and the $3-$5m range sales slow down and it becomes a buyers market with 19 month of inventory at $2-$3m and 29 months at the $3m-$5m range. Above $5m we see on average of 1 sale per quarter. The average price per sqft compared to last year? For 2020 we saw an average of $555 per SF (6 sales over $3M+) and properties stayed on the market for 1 year on average. For 2019 we saw 2 sales over $3M+with an average of $549 per SF. Properties stayed on the market for 448 days.

MIAMI BEACH HOMES IN Q1 2020

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MIAMI BEACH HOMES IN Q1 2020 The Miami Beach housing market has been challenged in both 2018 and 2019. Inventory currently sits at a blended 16-22 months (this means with current inventory it would take 16-22 months to absorb all the product), which definitely makes it a buyer’s market.

Other single-family neighborhood markets are faring better. With that said the market is performing better in Q1 2020 than it did in Q1 2019. Sales are up in both the $1-$2m range and the $2-$3m range. Why? We have seen enough reductions in listings that sales have accelerated.

In part 2 we discussed the $3M-$5M market as one with slow sales and many opportunities for those who want to take advantage and get great deals. The ultra luxury single family market (Over $5m) is slow with 45 months of inventory and recent sales have seen discounts by as much as 20%! On the other hand the ultra-luxury market of $10M+ is seeing a surge in sales numbers mainly fueled by wealthy tax refugees. For more information please refer to part 1 of our report.

VENETIAN AND MIAMI BEACH ISLAND HOMES A FOCUS ON WATERFRONT Q1 2020

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VENETIAN AND MIAMI BEACH ISLAND HOMES A FOCUS ON WATERFRONT Q1 2020 In 2019 we saw 18 sales of waterfront homes over $10m. This was certainly surprising as it represented a 100% increase from the year before. So what has been happening in 2020? Just 4 sales on the Islands (Palm, Star, Hibiscus, Sunset Islands and the Venetian Islands) so far this year.

Currently we have an incredible 92 waterfront listings across the Islands, ranging from $2.5m to $40m. An incredible 19 of these are new or very nearly new homes (built 2017-2020). The quality of options has certainly gone up in the last few years and buyers are spoilt for choice.

Obviously with COVID-19 the market has slowed and there are only 2 pending deals right now, both of which went pending at the end of March before the full awareness of Corona kicked in. Expect so good deals to occur in 2020 as inventory runs high.

Photo Credit: Darin Tansey, Douglas Elliman

MIAMI BEACH CONDOS Q1 2020

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MIAMI BEACH CONDOS Q1 2020 Miami Beach condo sales slowed down significantly in Q1 2020 (18 sales) compared to Q1 2019 (35 sales). How can we account for this slow down? Simply put; When we take a closer look at the different price points, we see that the decrease in the average price per sqft is due to the fact that there are no sales in 2020 over $2 Mil and below the $2 Mil mark the price per sqft has been much lower this year compared to Q1 of 2019. Up to $1m we saw an average sales price per sqft of $838 in Q1 2019 compared to $653 per sq ft in Q1 2020 and up to $2m we recorded $901 per sqft in Q1 2019 and $831 per sqft in Q1 2020.

Even if the lower-end market is more dynamic, product still sits on the market for over 250 days on average. Sellers seem to be more realistic with on average 7% discount rates from listing prices while Q1 2019 saw sales discounted up to $19% at Bath Club.

The best performing condos are Caribbean, a boutique condo just north of South Beach, Carillon and Green and Blue Diamond. The last 2 have witnessed 12 sales in the past 6 months with prices steady declining since 2018, but still selling at a good pace for this market. There are clearly two different condo markets in Miami Beach; the market below the $2M mark and another one over that mark, almost hibernated. The sales over $2m are mainly happening in South of Fifth, which is taking the wind out of Miami Beach.

87 Park closings started in Q1 2020 and we see this building (which is located just south of Surfside) bringing in massive sales for the luxury market, which is product over $5m.

SOUTH BEACH CONDOS Q1 2020

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SOUTH BEACH CONDOS Q1 2020 South Beach prices have now dropped so substantially since 2015 that the average price per sqft now matches 2013 sales prices.

Velocity of sales in 2020 matches 2019 figures with 12 sales over $1m and 23 sales under $1m. Across all price ranges there is around 24 months of inventory for South Beach. This is simply a sign of a correcting market with soft prices, reduced prices per sqft and a slow absorption rate.

Where and what are the best opportunities and options? The Mondrian and the Waverly lead the pack with the most sales in Q1.

1 Hotel and Homes and the W are the two most expensive condos and Capri offers the best value. Please call me for more info.

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SOUTH OF FIFTH CONDOS Q1 2020

SOUTH OF FIFTH CONDOS Q1 2020 The second most expensive condo market in Miami (after Surfside). This market currently holds 43 months of inventory (across the board), with an average of 300 days on the market. However, if you drill down into the price points, you see that the higher the price point, the longer it sits on the market. For example the market over $5m sees 52 months of inventory and properties sit on average 346 days on the market.

Half of the units in South of Fifth are over $2.5m. We are currently running close to the same prices we saw in 2013, which is a familiar story to other neighborhoods. Now in 2020 we are seeing true value and for the first time many units are touching the bottom or close to the bottom of the market.

Continuum remains a top choice for South of Fifth buyers. See part 3 of the report, which discusses the best condos in Miami and where you will find 4 of Miami’s most expensive condos are all in South of Fifth: Apogee, Continuum, 321 Ocean and Glass.

Regardless ALL of these condos are trading at 2013 prices or less.

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BRICKELL CONDOS Q1 2020

BRICKELL CONDOS Q1 2020 In Q1 2020 Brickell seemed to be on track to replicate its 2019 performance averaging $415 per sqft in sales. However, the specific price bracket of $1m – $2m was actually doing significantly BETTER than last year with an average price per sqft jump from $636 to $697. Nine sales were recorded. The average sales price in Q1 was $550,000 with an average list price of $590,000. This is marginally better than its 2019 performance. These are the 5 buildings holding the most inventory right now: SLS, Flatiron, SLS Lux, 1010 Brickell and Reach. The most expensive buildings: Santa Maria, Four Seasons and Echo.

Concerns for Brickell moving into Q2? Brickell is home to a lot of rentals and concerns may exist for tenants becoming unable to pay their rent. This is a concern for sellers and buyers of lower-end units ($300k – $700k). Generally speaking, Brickell remains a weak market.

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DOWNTOWN CONDOS Q1 2020

DOWNTOWN CONDOS Q1 2020 One Thousand Museum and Epic are clearly the top two most expensive condos in downtown. One Thousand Museum sits very much apart from the crowd. The introduction of Aston Martin Residences ready in 2021 will provide much needed elevation of luxury product in this market. Downtown tracks closely alongside Brickell and Edgewater and is all part of the same condo eco-system we call the ‘Urban Core’.

EDGEWATER CONDOS Q1 2020

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EDGEWATER CONDOS Q1 2020 With an average sales price of $420 per sqft we are back to midway between 2012-2013 prices. Just 10 sales for the first quarter of 2020 and only 4 of those came in the newer Edgewater condos (From 2010 onwards). We expect sales to slow even further as one can imagine showings have become a far more difficult prospect and we are now seeing the effect of ‘Condos closed to showings’.

The Paraiso buildings (One Paraiso, Paraiso Bay) are by far holding the most inventory and discounts are coming thick and fast. Please check reviews online and as with all new buildings be aware of the high number of rentals in these condos. Biscayne Beach may be your best option.

BAL HARBOUR AND SURFSIDE CONDOS Q1 2020

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BAL HARBOUR AND SURFSIDE CONDOS Q1 2020 These two combined are the best performing neighborhoods in Miami in the luxury sector. Q1 saw the top sales at: Oceana, Fendi, Four Seasons Surfside and St Regis. The top price per sqft in this market for 2020 was by the David Siddons group: $2,025 per SF with unit 1701 at Oceana. The performance of this neighborhood is now higher than it has ever been! This is extremely unusual considering all other neighborhoods are down. Please read Part 1 of the 2020 report, which discusses the best performing neighborhoods.

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SUNNY ISLES CONDOS Q1 2020

SUNNY ISLES CONDOS Q1 2020 Sunny Isles has been correcting for the last couple of years, as each quarter has passed the prices have dropped further and condo resales have receded further back mid way between 2012 and 2013 prices. The more expensive the unit, the more severe the correction.

Jade Signature, Jade Ocean and Porsche lead the way as the top 3 most expensive condos, which have had sales in 2020. Inventory continues to mount across the neighborhood and sales are slow with an average time on the market for current listings of 337 days.

Sunny isles is definitely one of the most vulnerable condo markets, but it now also offers some of the lowest prices for new and newer beach front condos in the whole of Miami. In Q1 2020 the average price per sqft sold for a condo that is dated from 2010 or newer broke in at $1,000 per sqft! Regalia, Porsche and Chateau Beach are running at massive discounts of 30% – 40% off their peaks!

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AVENTURA CONDOS Q1 2020

AVENTURA CONDOS Q1 2020 If Sunny Isles is the poster child for bargain basement condo beachfront deals then Aventura is certainly winning the prize for deals on the intracoastal waterways! Interestingly however Aventura sales have been picking up in 2020 with actually an improvement of around 5% in sales prices per sqft compared to 2019 across the 3 main condos that drive the luxury condo market here: Prive, Echo Aventura and Marina Palms.

PART 8: INVESTING IN THE MIAMI REAL ESTATE MARKET MART MIAMI REAL ESTATE INVESTING; WHAT TO FOCUS ON AND WHAT TO AVOID IN THE MIAMI REAL ESTATE MARKET?

The Q1 2020 Miami Real Estate Report

INTRODUCTION This is the final part to our 2020 Q1 Miami Real Estate Report. So far we have covered: The best performing neighborhoods, the worst performing neighborhoods, the strongest condo buildings, and the weakest condo buildings. We have unveiled how we analyzed the markets with the software we use, explored the economic mechanisms in play that are affecting our markets and taken an overview of each and every neighborhood. In this final part we look forward through 2020 and explore the ‘investment opportunities’ in Miami.

This question “What Miami real estate should I be investing in?” is one that I am asked very regularly. But never in 12 years of selling Miami Real estate (and with the incredible focus I have on analytics) have I ever been asked this question so frequently! So, why now may this be the most pressing question of all: ‘Is it a good time to buy?’ In Part 8 we will address: “Where we are in the economic cycle and why is this so relevant to investing?”, “What have been the most successful investments in the last economic cycle?”, “ROI and asset appreciation”, “Which neighborhoods saw the biggest % increase over the last 12 years?”, “Houses or Condos?”, “Commercial real estate”, “Where is the bottom of the market, and are we there yet?”, “Should I Be Investing in the Luxury Miami Real Estate Market?” and “Why is ‘multifamily’ the holy grail of investment real estate in Miami today?”

WHERE ARE WE IN THE ECONOMIC CYCLE AND WHY IS THIS SO RELEVANT?

WHERE ARE WE IN THE ECONOMIC CYCLE AND WHY IS THIS SO RELEVANT? Miami’s last economic cycle started in 2009. The market crashed out and we hit the floor pretty much in 2009/2010. The market then rose aggressively and for condos it peaked in 2015/2016. Back in 2015 I wrote the Owners Guide to Brickell and Downtown Miami Condos and in 2016 I wrote the Miami 2016 Residential Report. In both cases I warned for the falling condo market and gave a substantial amount of advice to sellers to get out, at the same time I told single-family home owners to hold or buy as these markets were going to remain strong, which they have!

As you will notice, I did not start writing reports yesterday, I have been doing it for years and my predictions have materialized as truths. I am certainly not omnipotent, but I have learned to pay attention to the right metrics of the market and you should too!

LET’S NOW LOOK AT THE CONDO MARKET CYCLE AND THEN THE SINGLE-FAMILY MARKET CYCLE.

LET’S NOW LOOK AT THE CONDO MARKET CYCLE AND THEN THE SINGLE-FAMILY MARKET CYCLE. Below I have highlighted the economic cycle across 3 different neighborhoods in the Miami real estate market (Brickell, South of Fifth, Sunny Isles). These markets follow the patterns mentioned above. What is very key in making a smart condo investment decision is recognizing where we can get close to the bottom of the market. I don’t say ‘at the bottom of the market’, because that can be impossible to predict exactly, but getting within a margin of error is good enough. Currently we are a long way off the last peak and one of the reasons why Miami is becoming such a focus for investment is because we know we are dealing with a growing city: population is growing, infrastructure is growing, wealth in the city is growing and the fundamental desire to live in Miami as a city is at an all time high. But at the same time sold properties are now coming in at 2012/2013 prices, a significant drop from their peak.

The single-family market, notably in the working wealthy category across the $0M-$2M range, has risen substantially also to 2015/2016, it then bubbled along and has of recent started to rise again. Investors have also been successful at buying homes, doing renovations and selling. I myself have done this several times on account that my wife owns Design Solutions a full home and remodeling company: www.Ds-miami.com

SHOULD I BE INVESTING IN THE MIAMI LUXURY REAL ESTATE MARKET?

SHOULD I BE INVESTING IN THE MIAMI LUXURY REAL ESTATE MARKET? Many investment reports focus on the cheaper Miami real estate market (the medium property price in Miami-Dade is $367,000 according to Zillow), but for many investors these properties are not suitable. They require too much attention and maintenance and for investors who are not on the ground, this simply won’t work. As an established agent in Miami I often help investors buy portfolios of units; multifamily, small buildings as well as larger condos and single-family homes. The luxury market is often not as much thought of for investors, but right now this could well prove to be a good focus. We have already seen a number of big investment trusts in Q1 2020 snapping up large parcels of luxury real estate in Miami. Please call me if your focus is luxury real estate in Miami and I will help you with smart Miami condo investments or single-family home investments.

With some many North Eastern relocations, limited and land locked neighborhoods we have solid demand. At the same time we have for the first time sellers who due to economic macro forces, eg: Currency, Covid 19 are being forced to sell and this disparity creates opportunity. According to business insider Miami will be the 2nd best performing luxury housing market on the planet for 2020!

HOW DO I MEASURE INVESTMENT SUCCESS ROI AND APPRECIATION OF ASSET?

HOW DO I MEASURE INVESTMENT SUCCESS ROI AND APPRECIATION OF ASSET? When we get into commercial we tend to get more focused on the CAP rate, talks of 7-8% CAPS. Of course this is nice, but in developed housing markets like Miami and working on the higher-end of the market ($500k+) these caps become fewer and further between. What I do see however, which plays more of a role, is how much the property goes up in value. When you have a basic cap rate of 4%, but then bake in the asset appreciation at 6 – 8% per year then a 10-12% ROI is very nice indeed. The purchase of a few properties can not only act as a good short against your position in other asset classes, but provide a very solid return. We work with both types of clients, those who are commercially or multi-family focused and those who are focused on residential.

WHICH NEIGHBORHOODS SAW THE BIGGEST % INCREASE OVER THE LAST 12 YEARS?

WHICH NEIGHBORHOODS SAW THE BIGGEST % INCREASE OVER THE LAST 12 YEARS? Miami condos (up to $2M) on the other hand aggressively rose between 2010 and 2015 and then took a drop shaving off at least 50% of some of the appreciative gains and in some cases even 80%. The nature of the cyclical condo market for investments is knowing not when to get in, but when to get out! Bear in mind that the average price per sqft increases for some markets has been very aggressive (like Bal Harbour and Edgewater) not because values in specific buildings went up 88% or 100%, but because new luxury product was introduced that was then selling at a totally different level. In 2010 it was almost unheard of to imagine units selling at $1,500 per sqft, but today we have condos selling at $3,000 per sqft. The type of product has changed enormously as buildings that rival those of the Manhattan or Hong Kong skyline have started to appear in large numbers.

When we look below at the chart we can clearly see how single-family homes have massively out-performed condos. Coconut Grove, Coral Gables and specifically North Pinecrest in the $0-$2m range have really accelerated in value over the last years. With many families relocating to Miami and the land locked and limited nature of inventory this market has not only done well, but there has at no point been correction or downward movement. There has been periods of stagnation of price where it has remained the same and then jumped again.

So answering the question: What have been the most successful investments in the last economic cycle? Definitely single-family homes. They outperformed the condo market by far. Of course there are smart Miami condo investments and I have helped many buyers with really superb deals, but in the long run homes are simply safer.

WHY IS ‘MULTIFAMILY’ THE HOLY GRAIL OF INVESTMENT REAL ESTATE IN MIAMI TODAY?

WHY IS ‘MULTIFAMILY’ THE HOLY GRAIL OF INVESTMENT REAL ESTATE IN MIAMI TODAY? The multi-family home market has become a huge focus for investors in the last couple of years. The ROI of multi-family is excellent and with people moving into Miami every day the need for multifamily outstrips supply. Stay tuned for my coming blog in the next few weeks which will be an interview with our top commercial guys as we discuss this area of the business. Because of the nature of commercial if you are not truly plugged into a group who handle this sector you will be met with a cold shoulder. So many investors and so few multi-family opportunities, means that the best deals are gone before they ever reach the market. The same can be said for many other commercial real estate opportunities. At the David Siddons Group we are aligned with the top commercial guys at Douglas Elliman and this is all they do, all day long. So if you have a need in this area, please call me.

DAVID’S FINAL COMMENTS So there you have it; 8 comprehensive parts to the Q1 2020 Miami Real estate Report.

Please do go back and read the earlier parts to this report and, please bear in mind that even if you are reading this at the end of Q2 or even Q3 it will still be relevant. In fact if you are reading it one year from the end of Q1 2020 so much of this will be helpful and relevant. Also remember if you have any real estate needs for buying or selling, please call (305 508 0899)or email me! (David@siddonsgroup.com). We are here to help.

DAVID SIDDONS EXECUTIVE DIRECTOR OF LUXURY SALES MOBILE: 305.508.0899 D A V I D @ S I D D O N S G R O U P. C O M L U X L I F E M I A M I B LO G . C O M 1515 SUNSET DRIVE, SUITE 10 MIAMI, FL 33143 1111 LINCOLN RD, MIAMI BEACH, FL 33139. 305.695.6300 © 2020 DOUGLAS ELLIMAN REAL ESTATE. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATION PURPOSES ONLY. WHILE, THIS INFORMATION IS BELIEVED TO BE CORRECT, IT IS REPRESENTED SUBJECT TO ERRORS, OMISSIONS, CHANGES OR WITHDRAWAL WITHOUT NOTICE. ALL PROPERTY INFORMATION, INCLUDING, BUT NOT LIMITED TO SQUARE FOOTAGE, ROOM COUNT, NUMBER OF BEDROOMS AND THE SCHOOL DISTRICT IN PROPERTY LISTINGS SHOULD BE VERIFIED

BY YOUR OWN ATTORNEY, ARCHITECT OR ZONING EXPERT. IF YOUR PROPERTY IS CURRENTLY LISTED WITH ANOTHER REAL ESTATE BROKER, PLEASE DISREGARD THIS OFFER. IT IS NOT OUR INTENTION TO SOLICIT THE OFFERINGS OF OTHER REAL ESTATE BROKERS. WE COOPERATE WITH THEM FULLY. EQUAL HOUSING OPPORTUNITY.

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