Miami is leading the nation’s luxury residential markets in price growth, according to a recently released report.
The Magic City’s luxury prices rose 6.5 percent in 2023, year-over-year, the most of any American city, according to Douglas Elliman and Knight Frank’s 2024 Wealth Report. The annual report, which tracks growth and trends of global wealth, pointed to the significant influx of wealthy residents into South Florida in recent years as a driver for the market’s price growth.
Following Miami were Boston and New Jersey, each with 5.6 percent in annual growth, California’s Orange County with 5 percent, Hawaii with 4 percent, Houston with 3.4 percent, Los Angeles with 2.5 percent, Aspen with 1.1 percent and San Francisco with 0.5 percent. Prices fell in New York and the Hamptons, dipping 2 percent and 2.7 percent, respectively.
The ultra-rich are relocating to South Florida in droves, fueling the region’s booming trophy market. Billionaire hedge funder Ken Griffin has amassed more than $1 billion in real estate in the tri-county region, including more than $350 million on a Palm Beach assemblage where he is now building a megamansion. Last year, Jeff Bezos dropped a combined $147 million on two adjacent properties in Indian Creek Village, AKA the Miami area’s “Billionaire Bunker.”
South Florida has always been a magnet for global wealth, given its warm climate, lack of state tax, and proximity to Latin America, but the market ballooned during the pandemic. Prices and the pace of sales hit unprecedented levels, and while sales volume has cooled in the face of the Fed’s rate hikes, the region sustained its price growth.
The report identified an influx of new residents from New York, New Jersey, and California, as well as corporate relocations to the region as driving demand for the area’s housing market. Still, the report cautioned that Miami has yet to topple the order of American cities.
“[Miami] still has a long way to go if it’s ever going to truly compete with the likes of New York, because of the sheer numbers. You still don’t have that critical mass of employment — but it has momentum,” Peter Bazeli, principal and managing director of the real estate consultancy Weitzman, said in the report.
The report also indicated concerns about Miami’s capacity to handle the influx of wealthy families and the range of services they require. Miami’s prestigious private schools in the area are at capacity, causing families to delay real estate purchases and moves.