Miami is a city whose very name conjures images of luxury. The fancy clubs and restaurants, the sandy beaches, the palm trees. Arguably no city in America is so synonymous with an upscale and luxurious lifestyle than Miami. Over the past year, this image has begun to align with the reality of the real estate market. Miami’s luxury real estate market, which includes homes of $1 million and up, has positively exploded in 2020, with a ton of momentum heading into the new year.
While Florida, in general, has experienced a real estate boom in the wake of the COVID pandemic, Miami’s luxury real estate sales are increasing at a rate that is far above the trend for Florida, and Miami as a whole. According to Mansion Global, million-dollar plus home sales have doubled year over year in Miami-Dade County. Meanwhile, single family home sales grew by 15.7%. While this is still significant growth, it pales in comparison to the astronomical growth of the luxury market.
It is not just the luxury homes in Miami that are experiencing a boom. Luxury condominiums are also having a surge in sales. In October of 2020, there were 27% more million-plus dollar condos sold than in October of 2019. Overall, the luxury market in Miami is objectively red-hot. But what is fueling this upward trajectory, and how will the rest of the market be impacted by this surge?
One impact that the luxury sales boom has had is that the median price of a home in Miami has shot upwards. Mansion Global states that the median single-family home in Miami now sells for $420,000, which is a 17% rise from a year ago. Even though these prices are rising, the number of sales aren’t stagnating or declining. According to the World Property Journal, Miami’s total home sales rose 3.5% in Q3 compared to Q3 last year.
This has led to a decline in inventory. According to the same report by the World Property Journal, the inventory for single-family homes in Miami decreased 37.3% year over year. This is a drastic drop that is likely part of what’s fueling the price increase. Of course, the number of luxury sales skyrocketing is a big contributor on that end, but with a decrease in inventory comes an increase in competition, which leads to bidding wars that raise prices.
Something else fueling the luxury real estate market is the migration of wealthy Northeastern and West Coast people. Florida is one of only a few states that doesn’t have a state income tax, and for people from New York and California, this is a huge perk. As well, New York City has seen a mass exodus throughout the pandemic as people look to head to a warmer climate. Miami has certainly capitalized on this migration from other areas, as the massive surge in the luxury market reflects.
Miami is a city that has become a place of luxury and new money. With areas like Miami Beach famous for their palatial mansions and upscale restaurants, Miami has long been known for its wealth. But in 2020, this was taken to a next level as the luxury real estate market soared to new heights. Spurred by an uptick in sales and a downturn in inventory, as well as a Northeastern and West Coast migration, the Miami luxury market remains red hot at the start of a new year.