Miami Beach and South Beach Real Estate Market OVERVIEW

Miami Beach condo sales activity has increased significantly in the second quarter of 2011, especially for waterfront luxury properties. The second quarter of this year was also defined by an increase in high-end Miami Beach home sales. The Miami Beach and South Beach condo and single family residential market experienced sales surges fueled by strong demand for waterfront and oceanfront properties. Ultra-luxury waterfront communities have witnessed near-record sales activity since the housing market price corrections of the past few years. For example, this year’s most ultra-luxury home sale was an incredible Star Island home that sold for an amazing $25,500,000.

Home price indicators saw positive gains, especially for zip codes 33139, 33140, & 33141 in Miami Beach with a boundary up to 30th street. The median sales price declined 15.9% year over year to $925,000 for Miami Beach single family homes. Consequently, the number of closed home sales transactions in Miami Beach increased 6.6% to sixty five individual homes sold during this period. High end, luxury homes sales increased and defined the market, which is consistent with the overall national trend of wealthy individuals (especially foreign buyers) driving the luxury real estate market in premier real estate areas of the country. Although Miami Beach single family home prices declined as sales edged higher (median sales price declined 15.9% to $925,000 down from $1,100,000) which is about 14% of Southeast Florida regional sales.

In highly desired waterfront areas with a high concentration of luxury condo buildings (such as the South of Fifth neighborhood of South Beach) slightly lower sales prices, and an influx of wealthy cash buyers, attributed to a large increase in the number of sold condominiums. Miami Beach's market trends indicate a stabilization in condo prices, with the average price per square foot declining by just 0.6% year over as the number of closed sales surged 25.3%.

Miami Beach's overall Real Estate Market has seen much positive news this year, including an increase in luxury waterfront condo & home demand, record breaking sales, more affordable sales prices, condo building sell-outs, and a steady stream of international buyers making second and vacation homes purchases on Miami Beach.

Summary of Miami Beach Real Estate Market activity
Miami Beach Home sales statistics for zip codes 33139, 33140, 33141
Single Family Homes for Sale ($1 Million and above): 294
Miami Beach Homes Sold YTD ($1 Million and above): 86
Average Miami Beach Home Sale Price: $3,401,000

Market Analysis of Miami Beach Home Sales YTD

Miami Beach Condo sales statistics for zip codes 33139, 33140, 33141:
Condos for Sale ($1 Million and above): 1,812
Miami Beach Condo Sold YTD ($1 Million and above): 163
Average Miami Beach Condo Sale Price: $2,260,810

The recent market activity for Miami Beach luxury homes, especially for premier waterfront properties, and South Beach condominium buyers is impressive. Although the national newsmedia continues to tell us that the national housing market is depressed, I can attest that my team and I are VERY busy these days. Almost all of our listed properties, whether they be single family homes or condominiums in both Miami and Miami Beach, have either sold or are under contract with well-qualified Buyers.

As I write this, in early January of 2011, my team and I have been overwhelmed by the strong Buyer activity of the past two months as high season has kicked into gear for Miami Beach Real Estate Buyers and Sellers. We're averaging a new Buyer inquiry EVERY HOUR- these usually come from our various Miami Beach condominium and luxury homes websites, and our international Brokerage partner portals in Latin America.

As our inventory of exclusively listed homes and condominiums in Miami Beach has been sold, we've been actively reaching out to homeowners in our target market of Miami Beach homes and condos. Potential sellers should be capitalizing on this growing demand for premier Miami Beach homes and condos from both USA-based and International Buyers by working with the RIGHT marketing Real Estate Agent / Brokerage Firm.

Key traits that Sellers should look for in a Miami Beach Real Estate Agent:

Latest Miami Beach Condominium and Homes Closed Sales Data:

I am an optimist and expect us to have a bright and active future marketing and selling Miami Beach single family homes to both to international and domestic buyers looking to own a piece of paradise. Following up from our last sales update regarding the overall trend in terms of prices and pending sales trends for Miami Beach (South Beach area) for January, 2010:

Some local Miami Beach perspective on this latest sales trends for zip codes 33139 and 33140:

55% of the homes sold in January in Miami-Dade County were priced under $500,000 and these homes that sold were actively on the market for an average of 30 days.

Price trends at the lower end of the market have been positive, with the latest closed sales showing flat pricing, and in some cases a slight appreciation in neighborhood values. However, in the higher price ranges (over $500,000), we are still seeing weakness in demand and no decline in supply of new inventory.

Below is the supply of houses listed for sale in Miami-Dade County in October, according to the MLS:

• - Under $500,000: eight-month supply of homes
• - $300,000 to $1 million: 21-month supply
• - Over $1 million: four-year supply

Miami Beach’s luxury housing market falls into mainly in the over $500K category, however, the supply is much more restricted due to the fact that these are islands communities. Also, since there is no new construction taking place, I continue to expect Miami Beach's housing inventory to slowly work it's way down to a healthy six to nine month supply for the luxury segment of the market.

Miami Beach Housing Inventory:

• - $300,000 to $500,000: less than six month supply
• - $500,000 to $1 million: 15 month supply
• - Over $1 million : 24 months supply

As I speak to an ever-increasing number of motivated sellers as part of my daily/weekly round of listing appointments, I continue to emphasize to everyone that there is NO room in the local housing market for overpriced listings. The strongest demand continues to be for turnkey (completely remodeled & finished) waterfront and non-waterfront homes that are priced RIGHT! The issue today is not so much the current inventory levels of unsold homes, it's the expected supply of NEW Miami Beach unsold homes that are expected to come on the market in the next few years. I personally know of quite a few sellers that have kept their homes off of the active market waiting and hoping for the market to "turn around".

To view latest Miami Beach sales data, click here.

* Data Sources: MLS & Miami-Dade Public Records

A few month's ago, Jim Cramer (from the financial network CNBC), predicted a housing market bottom. For anyone considering buying a waterfront property in Miami Beach, and most specifically in South Beach. NOW is the time to be making offers on well priced Miami Beach homes or condos in premium waterfront buildings.

Cramer’s Key Points:

* Inventory is drying up & being steadily being absorbed
* Housing starts have been down for over two years
* New construction projects stopped two years ago
* Florida is generally one year ahead of market trends
* Interest Rate cuts have had a positive effect in absorbing excess inventory (at much reduced prices)

Miami Beach single family homes (especially waterfront luxury homes) that are truly good deals continue to be in short supply. I’d like to take this opportunity to highlight two latest sales in the island communities off Miami Beach which are indicative of a price bottoming trend:

Luxury Waterfront Island Home - 830 W Dilido Drive, Miami Beach
Tropical paradise for that was on the market for sale for just 12 days at the final asking price of $2.9 Million. Wide bay views at the north tip of Venetian Islands.

Key “Market Bottom” indicators:

“For Sale” Price: $2,950,000 (12 days on the market at this reduced price point)
Original List Price : $4,700,000 (July, 2008)
Previous Price Reduction: $3,450,000 (January, 2009)
Bedrooms: 4
Bathrooms: 3
House S.F.: 3,734
Land S.F.: 13,408
Closed Price per S.F.(Land): $194
Closed Price per S.F.(House): $698
Previous Sold Date: 2004 ($3,150,000)
Closed Price: $2,610,000 (Sept 2, 2009)
Discount from Latest Asking Price: 11.5%

Property Address: 25 East Rivo Alto Drive in Miami Beach, Florida 33139
Rivo Alto Island Waterfront Home – Completely Remodeled. Located on the preferred southern side of the Venetian Islands. This Mediterranean delight greets with a beautiful courtyard setting reminiscent of a European Villa. The sale also included a separate two story adjacent guest house.

Key “Market Bottom” indicators:

“For Sale” Price: $2,590,000 (19 days on the market at this ACCURATE price point)
Bedrooms: 4
Bathrooms: 4
House S.F.: 3,894
Land S.F.: 13,382
Closed Price per S.F.(Land): $175
Closed Price per S.F.(House): $740
Previous Sold Date: 1998 ($950,000)
Closed Price: $2,350,000 (Sept 1, 2009)
Discount from Latest Asking Price: 9.2%

As Real Estate sales specialists in waterfront properties in Miami Beach, what we’re seeing is waterfront and non-waterfront single family homes that are priced RIGHT receive multiple purchase offers and are selling relatively quickly close to the final asking price.

You’ve entertained the thought of investing in Miami Beach luxury homes but you don’t want to take the risk of losing money since prices are still going down, that’s certainly understandable. In such a situation, it may be wise to seize upon the heightened demand for rental homes which produce a steady income and can be sold off once the South Florida real estate market gets better. Becoming a landlord of sorts does however come with a few important items to be aware of.

A rental home is a business. While for you it may simply be a residential property investment, the money generated from rent is a form of income which means it’s taxable. Most insurance policies do not cover what is now a business which means you may need to take out additional insurance in order to protect tenants and the property itself in case of damages.

Lawsuits do happen.In a perfect world tenant lawsuits would not exist but they can happen. Strongly consider hiring a lawyer or property manager who knows what laws and regulations the state has when it comes to rental property. They can also make sure the rent you’re charging for that Miami Beach oceanfront condo is justified.

Appearances are deceiving. Anyone can say they’re financially responsible but their credit report may prove otherwise. Taking the time to know who the tenant is and whether they’re a financial liability waiting to happen can save you headaches and lots of money in the end. With that in mind, it may be wise to consider a lease to reduce the chances of the tenant suing you if they’re evicted.

Rental properties are homes themselves.They may not have the same appeal as actually owning a Miami Beach home but tenants still put a lot of importance on the appearance and upkeep of the property they’re paying rent for so it ultimately works in your favor to ensure it looks nice and is well maintained.

The Kleer Team specializes in renting luxury condos in South Beach, Miami Beach, Bal Harbor, Sunny Isles Beach, and Downtown Miami. With our annual rental program, we can help you find the perfect condo you are looking to rent in Miami Beach. Click here to search available Miami Beach Condos for rent.