With the economic uncertainties posed by Coronavirus and the crisis which it has brought along with it. Many investors are wondering what happens in the real estate industry. The sense of fear and panic has captivated the whole landscape which had dwindled the creative abilities of many real estate companies and agents. This report is therefore a means to give you hope and show how best to navigate this treacherous climate we find ourselves in. Although, many companies have folded up with people afraid to invest in real estate, believe it or not, but this may be the best time to sell real estate.
COVID as much as it has been a dreaded curse that everyone wants to pass away did not change the way things have been. It only accelerated the trend that we see in today’s real estate market. How so? There is an increased rate of people investing in office spaces and home offices in a bid to cope with the recent pandemic. Most organizations are working remotely or have a make-shift office. Since the pandemic hit there have been increased sales of homes in parts of America for different reasons. For work, school and the general fear of COVID in highly volatile areas. Let us get into more detail why this the best window to sell real estate.
In Miami’s overall luxury condo market was the busiest quarter since 2015. Below is analyzed data for the luxury condo market for Miami Overall and key Miami cities. In this report, we discuss the Annual plus Q4 2020 Miami Beach Luxury Condo Market data. With Miami Beach, Sunny Isles Beach, and Fisher Island reporting record-high quarterly sales like the rest of Miami, Q4 for the Miami beaches closed on an exceptionally positive note. Considering the slowdown caused by the global health crisis, most of the Miami Beach areas made a strong recovery, giving us reason to expect a better than usual Q1 2021. Al Sub-neighborhood Highlights
2020 Annual Miami Beach + Sub-neighborhood Luxury Condo Market Highlights Annual Sales down 3.7% against 2019, but highest total sales since 2016-2018
Annual Price per Square Foot flat at $852 in 2020-over-2019 analysis
Annual Days on Market decline 16.2% in 2020-over-2019 analysis
Winners: Fisher Island (19.4%) and Sunny Isles Beach (18%) top popularity charts, lead annual sales growth in Miami Beach
Winner: Surfside and Bal Harbour (combined) leads price growth in Miami overall with highest percentage increase in Price per Square Foot – offering maximum value to sellers
Winner: Fisher Island is the most expensive neighborhood of 2020 with a median price of $1,054/sq. ft., closely followed by South Beach at $1,026/sq. Ft.2020 closed as buyer’s market, but trends indicate a correction to a balanced position in 2021
Q4 2020 – Miami Beach Luxury Condo Market Highlights
Sales up 40.6% year-over-year, set new record in over 6 years
12-month sales trend-line up from flat in Q3 to positive in Q4 2020
At $806, Price per Square Foot down to lowest in over 5 years
Days on Market down 23.4% year-over-year
Inventory down to all-time low of 32 months
Q4 2020 – Miami Beach Sub-neighborhood Highlights
Winners: Fisher Island (142.9%) and Sunny Isles Beach (140.7%) top popularity charts again, lead quarterly sales growth in Miami overall
12-month sales trend-line positive across the board
Mid-North Beach is the only neighborhood to report a decline in year-over-year sales
Winner: Fisher Island posts highest percentage growth in year-over-year price per sq. ft. (8.2%) in Miami Beach
Winner: Fisher Island is the most expensive neighborhood of Q4 2020 with a median price of $1,128/sq. ft.
Surfside and Bal Harbour (combined) posts biggest percentage decrease (59.8%) in Days on Market in Miami Beach
Fisher Island reports the lowest year-end inventory (15 months) of all Miami neighborhoods
South Beach posts highest inventory (39 months) in Miami Beach
The Miami Beach Condo Market Report; Transaction volumes in Q3 and Q4 of 2019 compared to 2020 (Left) The Miami Beach Condo Market Report; Prices per SF in Q3 and Q4 of 2019 compared to 2020 (Right)
The Miami Beach Condo Market Report; Discounts on the sales price in Q3 and Q4 of 2019 compared to 2020 (Left), The Miami Beach Condo Market Report; Months of inventory in Q3 and Q4 of 2019 compared to 2020 (Right)
Miami Beach Market Trends: Luxury Condo Sales Down Annually, Q4 2020 Sets New Record
With yearly sales just 3.7% short those of 2019, Miami Beach still reported higher total sales in a year compared to 2016, 2017 and 2018. This shows that the market not only cashed in on pent-up demand from Q2, but also had new buyer interest give the last quarter an exceptional boost.Annual Sales down 3.7% compared to 2019, but highest since 2016 with positive trend-line
Even with the pandemic plummeting sales mid-year the last two quarters of 2020 posted an extraordinary recovery to bring annual numbers back to historic values – much like the overall Miami market.
Fisher Island and Sunny Isles Beach were the biggest contributors to the bounce seen in annual numbers here. While Fisher Island reported a 19.4% year-over-year increase against 2019, Sunny Isles Beach posted an 18% increase. With an unprecedented close to an unprecedented year, the 12-month sales trend-line went from being flat-is in Q3 2020 to a soaring positive in Q4, pointing to chances of a strong Q1 2021.
Q4 2020 closes with all-time low of 32 months of Inventory. As sales picked up towards the tail-end of the year, inventory levels settled down to an all-time low of 32 months in Miami Beach. This figure is also significantly lower than the pandemic-caused peak seen in June (55 months).
At 32 months, luxury condo inventory dropped 36% quarter-over-quarter (50 to 32 months) and 25.6% year-over-year (43 to 32 months), much in line with the overall Miami trend. This gives buyers a limited window of opportunity to drive negotiations before levels drop down to the 9-12-month benchmark of a balanced market, making buyers lose their edge. To look at what luxury condos are available for sale in Miami Beach, click here.
Travel restrictions will soon be a reality with the way things are going at the moment. So, people are taking the money for a vacation to Cannes, Paris, Maldives and other exotic places and investing them in vacation homes close to them. This is not the best time to be on the fence, as long as other people have this same idea, prices will eventually go up. Consequently, making you a lot richer based on the move you make today. Imagine the people that have bought these vacation homes years ago, they would be somewhere during this lockdown enjoying the profitable decision they made. Thinking long-term starts from taking action now.
South Beach: Annual Sales Down, Up YoY for Q4 2020 – Annual Sales down, but trend-line shifts to positive. Consistent with the overall Miami market trend of lower annual sales, South Beach reported a decline of 21.5% in total sales compared to 2019. With the first three quarters of 2020 posting lower-than-average numbers due to the pandemic, it was quite expected that the neighborhood would take a while to recover completely.
However, what’s worth noting is that the 12-month sales trend-line corrects from a negative in Q3 to a positive in Q4 2020 – pointing to chances of a good start to 2021 in South Beach.Q4 2020 sales up 8.6% year-over-year + highest sales in a Q4 since 2015
Posting a 72% increase from its record-low sales in the previous quarter, Q4 turns around to become the best-performing quarter of 2020 in South Beach. With the highest number of sales in a fourth-quarter in over 6 years as well as an 8.6% increase in year-over-year volume, this popular beach destination closed 2020 on a positive note.
South Beach Luxury Single Family Home Market
Miami Beach is one of Miami’s most desired neighborhoods and close to the city’s best private schools. As Miami is experiencing a very high amount of relocations, mostly of families with young children, the area is very much in demand and has seen a large increase in sales in 2020. Looking at the sales data we see that the market of $1.5M+ homes has really gained in strength in the last months of 2020.
Compared to the same period in the year before we see a 100% increase in sales (from 11 to 22 sales) and a 11% increase in the average sales price per SF. The average discount on the final listing price was already low with just 6% of discount and has now decreased to as low as 5%. Not shown in the tables, but certainly important to mention is that the average days on market decreased from 165 days in 2019 to 98 in 2020, a 40% faster marketing time. Arguably the most important key indicator in real estate is inventory; measured in months.
The months of inventory provide you with information about the supply and demand relationship or the absorption rate of a market. The months indicated here are the months it will take to sell all available product if no new product were to enter the market and Alton selling 2 homes per month on average. Between 6 and 9 months is generally considered a neutral or balanced market while less than 6 is a sellers market and more than 9 a buyers market. As you understand the inventory in South Miami is as low as 6 months indicating a very bearish market. We noticed that in 2020 72% of the homes that sold were homes constructed in 2015 or later. This is indeed by far the most desired type of home for today’s buyers.
However only 54% of the available listings are new construction. This means that new construction homes are most likely to become even scarcer and prices to increase. In 2020, a new construction home sold on average for $664 per SF while an older construction sold for less per SF.
South Beach Luxury Condo Quarterly Sales 2015-2020
South Beach: Luxury Condo Prices Down – Annually + Q4 2020 Annual . Price per Square Foot down to $1,026, Median Price also down 9.3% year-over-year. In contrast to the overall Miami market trend of flat annual prices, both the Price per Square Foot and Median Sales Price reported a decline in South Beach. The Price per Square Foot dropped 10.9%, down from $1,151 in 2019 to $1,026 in 2020. The Median Price also declined 9.3%, down from $1,875,000 in 2019 to $1,700,000 in 2020.
Q4 2020 Price per Sq. Ft. down 17.9% to $942, Median Price down 13.7% year-over-year. Consistent with the overall Miami market trend of lower year-over-year prices, both the Price per Square Foot and Median Sales Price dropped in South Beach. Year-over-year, the Price per Square Foot dipped 17.9%, down from $1,147 in Q4 2019 to $942 same quarter 2020. This points to a great opportunity for buyers, as the Price per Square Foot closed at below $1,000 in this sought-after beach neighborhood.
The Median Sales Price too declined 13.7% to $1,575,000 in Q4 this year from $1,825,000 in Q4 2019.Annual Days on Market decline 28.5% Consistent with the overall Miami market trend of lower Days on Market, luxury condos in South Beach spent 39 fewer days on the market compared to 2019. This shows how buyers and sellers found it easier to come to a consensus compared to the previous year.
Q4 2020 Days on Market drop 48.9% year-over-year. With Q1 to Q3 losing sales momentum mostly due to the pandemic, South Beach posted the highest levels of inventory in Miami Beach. At 39 months, although luxury condo inventory dropped 11.4% quarter-over-quarter (44 to 39 months), it was 8.3% higher year-over-year (36 to 39 months). This is partly in line with the overall Miami market trend of significantly lower inventory in Q4.
While prices are down and inventory is still a long way from reaching the 9-12-month mark of a balanced market, buyers should note that the trends are showing an aggressive correction fueled by demand. Interested buyers should take advantage of these data and markdowns in this popular beach destination. To look at the kind of luxury inventory available in South Beach condos, click here.
If you are interested in buying or selling a condo in any of these Miami Beach neighborhoods, or would like more information about the data in our reports, please email us anytime or call (305) 209 – 5017.
Fisher Island: Leads Sales Growth in Miami Beach – Annually + Q4 2020
Annual Sales up 19.4% against 2019 with soaring positive trend-line. Bucking the overall Miami market trend of lower annual sales, Fisher Island reports a 19.4% increase in annual numbers compared to 2019. The extraordinary number of sales in the last two quarters of 2020 help make Fisher Island one of only two neighborhoods in Miami Beach to report annual sales growth (besides Sunny Isles Beach). This sends the 12-month sales trendline soaring in Fig. 27.2, keeping it positive from Q3 to Q4 2020.
Q4 2020 up 142.9% year-over-year, leads sales growth in Miami Overall. With the highest quarterly sales since Q2 2016, Fisher Island became the highest performing Miami neighborhood of Q4 2020, leading sales growth in Miami Beach and our overall Miami market study. This is also the highest that sales have been in a fourth-quarter since 2015, pointing to a remarkable recovery from the pandemic-caused slowdown mid-year for the luxury condo segment in Fisher Island.
Fisher Island: Luxury Condo Price per Square Foot Highest in Miami Overall – Annually + Q4 2020. Annual Price per Square Foot flat at $1,054, Median Price up 9% year-over-year. Partly in line with the overall Miami market trend of flat annual prices, only the Median Price deviated posting an increase for 2020. The Price per Square Foot moved only slightly from $1,056 in 2019 to $1,054 in 2020. On the other hand, the Median Price went up 9% from $4,175,000 in 2019 to $4,550,000 in 2020. This difference in trends could be due to the increased sale of larger units, where the price per square foot tends to spread thinly over the size of the condo.
Q4 2020 Price per Sq. Ft. up 8.2% to $1,128, Median Price up 22.3% year-over-year. Bucking the overall Miami market trend of lower year-over-year prices, both the Price per Square Foot and Median Sales Price registered an uptick in Fisher Island. The Price per Square Foot went from $1,043 in Q4 2019 to $1,128 in the same quarter 2020 – an increase of 8.2%. The Median Sales Price too went up from $4,150,000 in Q4 2019 to $5,075,000 in Q4 2020 – an increase of 22.3%.
Annual Days on Market down 28.5%. In sync with the overall Miami market trend of lower Days on Market, luxury condos in Fisher Island spent 43 fewer days on the market compared to 2019. This indicates an improvement in buyer-seller communications over the course of the year, showing that they were on the same page regarding dealings.
Q4 2020 Days on Market down 47% year-over-year. In line with the overall market trend of lower Days on Market for Q4 2020, luxury condos spent 83 fewer days on the market compared to the same quarter 2019. Even on a quarter-over-quarter basis, luxury condos spent 115 fewer days compared to Q3 2020. Fisher Island: Inventory Down to Lowest in Miami Overall. Q4 2020 closes with 15 months of Inventory. Dropping to one-fourth the peak seen in June 2020 (61 months), luxury condo inventory makes great strides over the last 6 months in Fisher Island. At 15 months, inventory levels declined 40% quarter-over-quarter (from 25 to 15 months), and 48% year-over-year (from 29 to 15 months). This is consistent with the overall Miami market trend of lower year-over-year inventory seen in Q4.
With inventory closest to reaching the ideal 9-12-month benchmark of a balanced market, buyers should take note that they have a limited time to make the most of these favorable conditions before it flips into a sellers’ market. To find the sort of luxury condos available in this exclusive island, search Fisher Island condos for sale here.
Fisher Island Months of Inventory from Mar. 2019 to Dec. 2020
A balanced market has only 9-12 months of inventory. The months of inventory are calculated as – no. of active listings + no. of pending listings divided by the average number of deals in the last 6 months.
Conclusion: Q4 2020 Miami Beach Market
With the market having been poised for a rebound in Q3, the numbers in Q4 2020 confirm a full market recovery from the pandemic-related mid-year pause. Quarterly sales were up across the board, much like the overall market trend in Miami. While Fisher Island (142.9%) and Sunny Isles Beach (140.7%) reported the highest sales growth in Q4 2020, only Mid-North Beach posted a decline (-17.6%) in year-over-year numbers.
Sales: On an annual basis, total sales in Miami Beach, South Beach, and Mid-North Beach were down compared to 2019, just like the overall Miami trend, but must be viewed through the lens of the mid-year slow-down. However, Fisher Island and Sunny Isles Beach deviated from the trend to post the highest growth in annual sales as well – emerging as buyer favorites in 2020. The 12-month trend-line at the end of Q4 was positive across the board, just like the overall Miami market trend.
Prices: For Q4 2020, the Price per Square Foot was mostly down like the overall market, with Miami Beach, South Beach, Surfside and Bal Harbour plus Sunny Isles Beach reporting year-over-year declines. Fisher Island was the only neighborhood to report a year-over-year increase of 8.2% in its Price per Square Foot, making it the most expensive neighborhood in not just Miami Beach, but also Miami overall.
In Q4 2020, the Price per Square Foot in South Beach fell to below the $1,000-mark, giving buyers a great entry point into the neighborhood. Other than that, Surfside and Bal Harbour (combined) posted the lowest Price per Square Foot ($651) for luxury condos in Miami Beach, making it the best entry point for buyers into this coastal grouping. On an annual basis, the Price per Square Foot posted varied trends, however, a majority of the neighborhoods reported flat prices in the 2020-over-2019 analysis.
Days on Market: In Q4 2020, the Days on Market were down across the board in Miami Beach, just like the overall Miami trend. Only Sunny Isles Beach deviated with an increase in its year-over-year Days on Market. On an annual basis too, the Days on Market were mostly down in Miami Beach, much like the overall market, with only Mid-North Beach and Sunny Isles Beach reporting no change from 2020 to 2019.
Inventory: As can be expected, with the Q4 2020 sales touching the roof in most neighborhoods, inventory was down across the board. Only South Beach posted an increase in year-over-year trends, also turning it into the sub-market with the heaviest level of inventory in Miami Beach. Fisher Island’s dynamic market got closest to reaching the 9-12-month benchmark of a balanced market with 15 months of inventory – showing strong signs that this long-standing buyer-friendly market could finally see its end.
With all the pent-up demand from the pandemic months coming through, we still have reason to expect very strong sales momentum in early 2021 because of the following reasons:
An avalanche of buyers migrating from the high-tax states in the Northeast and West Coast, especially New York and California
As most big businesses and top executives move to enjoy Miami’s zero personal income tax and other tax benefits, we expect more people following them down As the uncertainty around the elections has ended, investor-buyers sitting on the bench now find the motivation to act
As the flexible work from home policies take precedence everywhere, those looking to build a life closer to the beach, have a better lifestyle or simply migrate to a warmer climate can do so. Also, with inventory levels dropping significantly in most neighborhoods and fewer new deliveries expected this year, as real estate experts, we expect 2021 to be the year to watch in terms of switching from this over-extended buyer’s market cycle. Certain segments such as Fisher Island plus Coconut Grove and Coral Gables, are the first to show they are moving into a more balanced market position in 2021. This means buyers have a shrinking window of opportunity to control negotiations and exert the upper hand in dealings as they move into 2021.
Talk to Experts
This is a great time for real estate especially the professionals who know how to navigate through these testing waters of the pandemic. No matter the amount of research you do, make sure that you have the backing of a professional before selling and investing in properties this season. Real Estate is such a peculiar industry that different communities and areas have divergent strategies and challenges as well. It is amazing that experts also have a network of other professionals that guide them and provide more insight into investment opportunities in real estate.
The current situation of the world has given us an indication where we are going to and how we are going to survive in the years to come. With work done remotely and other transactions in the comfort of people’s homes, it is easy to pinpoint the status of real estate in the years to come. Residential real estate has become a sight for sore eyes in the industry as many investors a repotting for this kind of property. Low rates, the focus in the work-from-home set-up, low inventory all lead to residential real estate being the norm for both buyers and sellers in the real estate industry.
Although, the area of the property does play a vital role in the increase in the purchase of residential homes has become frequent. In essence, the buyer demand is at one of the highest states it has ever been in recent times. Many buyers are trooping in to find a solace for their business, as well as others, relocating.
As much as the market is shifting, it is important to find a long-term trend that will hold off in difficult situations. Residential real estate is gaining a lot of traffic in the industry; however, it is time to take action and look at other alternatives. For you to be able to thrive in the industry, looking for new ways to expand your empire helps you solidify your foot in the game. The sad truth is the pandemic might still last longer than most of us anticipate with new cases coming up every day. However, it is the best time to maximize the opportunities that real estate has given to you. Studying the trend and anticipating future events is a great way to stay ahead.
Getting the best out of real estate this season means acting strategically. It will not be wise to invest in small condos as people are running away from tight spaces with the virus still in the forefront of things. The best bet is larger spaces where people can work and live together without any fear.
Conclusively, if you keep waiting in the right time to invest then you most likely will have to wait a long time. There is no perfect time but making the best out of what has been given. Many people saw the pandemic as the end to many real estate operations but having the right strategies can produce amazing results. With the low inventory and reduced rates of homes, sellers can enjoy themselves. Since houses have become more affordable, sellers profit immensely from the high demand for purchases. However, it is expedient to think about how best to maximize this rush with more people looking for properties to buy for work, family and other reasons.
Questions or comments about the stats? Interested in browsing the market? Contact Adi at [email protected] or call 305-209-5017.