The lowdown on South Florida’s high end

Nelson Gonzalez’s first inkling that the South Florida housing market was lurching forward came from listing a waterfront Miami Beach mansion for $20.4 million in late 2020.

“I realized we were in for a major push when we got five offers at the same time,” said Gonzalez, an agent with Berkshire Hathaway HomeServices EWM Realty.

It turns out that the storm was just starting to break in South Florida’s luxury real estate market. Prices rose so quickly that the newfound owner of the house on Miami Beach’s Venetian Islands flipped it four months later for $23.5 million.

Throughout South Florida in 2021, buyers flooded the market, snapping up high-end properties and setting price records, according to an analysis of Multiple Listing Service data by The Real Deal.

Demand was driven by the pandemic, as the rise in remote work freed CEOs, entrepreneurs and employees to relocate. Florida’s lack of a state income tax, openness and lifestyle added to the allure.

MLS data, representing single-family and condo sales in Miami-Dade, Broward and Palm Beach counties, was provided to TRD by The Keyes Company. It breaks down sales of homes sold for more than $10 million, those sold for between $5 and $10 million, for between $1 and $5 million and for less than $1 million.

For every category except homes sold for less than $1 million, the number of sales and total dollar volume for the period from December 2020 to November 2021 surpassed the combined totals from the previous two years.

Between December 2020 and November 2021, the number of homes sold for more than $10 million reached 394, with a total dollar volume of $6.9 billion. That’s a 158 percent jump from the number of homes sold during the same time period a year prior, and a 191 percent boost — or nearly tripling — in dollar volume. 

“There’s a lot of wealth creation driving the luxury market,” said Mike Pappas, CEO of The Keyes Company, referencing tech and crypto industries, in particular.

The comparison is even starker when comparing the December 2020 to November 2021 period and the December 2018 to November 2019 time frame. Only 104 homes priced over $10 million were sold between December 2018 and November 2019, with a total dollar volume of just $1.6 billion. 

For homes sold for between $5 and $10 million, the number sold and total dollar volume more than doubled from the period of December 2019 to November 2020 to the period from December 2020 to November 2021. The number of homes sold rose to 926 from 373 — skyrocketing 148 percent. The dollar volume rose from $2.5 billion to $6.2 billion, a 149 percent climb.

The trend continued for homes sold between $1 and $5 million. The latest period, from December 2020 to November 2021, saw 12,065 homes sold with a dollar volume of $22.8 billion. That compares to 5,656 homes traded from December 2019 to November 2020, for a total of $10.4 billion. Those figures rose by 113 percent and 119 percent, respectively.

Although homes sold for less than $1 million saw a robust increase, they broke the trend of doubling from the previous year. The year’s total dollar volume beat the previous year’s by more than $12 billion, up 40 percent. A total of 118,088 homes sold, with a dollar volume of $43.3 billion. That compares to 94,271 homes sold for a total dollar volume of $30.9 billion the year prior. The number of sales increased by 25.3 percent.

“We saw a healthy increase, but not a supercharged one, as with the luxury market,” said Pappas. 

Buyers of homes priced under $1 million tend to be more constrained by employment and mortgages, while those who can afford properties over $1 million often pay cash, Pappas added.

At the highest end, sales of waterfront houses of $10 million or more have particularly soared. In December, a waterfront Star Island mansion sold for $75 million, setting a new record in Miami-Dade County.

In Palm Beach, an oceanfront Palm Beach spec mansion sold for $41 million in December.

And in October, repo king Patrick K. Willis bought a waterfront Fort Lauderdale mansion for $12.5 million.

Tech and finance moguls are among the buyers of the priciest homes. In November, Goody co-founder Ed Lando paid $15.1 million for a waterfront home on Miami Beach’s Venetian Islands. 

Homeowners were also able to flip houses in a matter of months for big profits. In November, a cannabis and crypto investor flipped his waterfront Bay Point mansion in Miami for $18 million — $1 million more than its purchase price six months earlier.

The raging luxury housing market also played out in the slightly lower tier of sales of $5 to $10 million.

Prior to the pandemic, a non-waterfront Miami Beach home selling for $5 million or more was unheard of. Yet in 2021, sale prices for several houses reached that mark.

Among the latest sales, a non-waterfront home at 3175 Prairie Avenue punched well past the $5 million price barrier, selling for nearly $6.6 million in December.

In September, former Miami Dolphins linebacker Orlandus Andre Branch III sold his non-waterfront Miami Beach home at 4535 Nautilus Court for $6.3 million. 

Julian Cohen, an agent with the Jills Zeder Group at Coldwell Banker who represented Branch, said that he received multiple offers for the home. 

“It was a massive, record-setting sale for the neighborhood,” Cohen said.

South Florida’s numbers were sky-high in 2021, but Pappas noted that there’s no guarantee that the trend will continue at this pace throughout 2022.

“We’re still playing at strong numbers,” he said. “But how long can this go?”