As developers again race to erect shimmering luxury condo towers throughout Miami, South Florida’s resale market is also booming, buoyed by full-time residents, instead of cosmopolitan investors. In February, the average sale price of an existing home in South Florida increased 17.5 percent year-over-year to $423,511, from $360,430, according to Condo Vultures.
Palm Beach County, known for its stately homes, saw the largest increase from February 2013. The average price of a resale home in Palm Beach soared 25 percent, to $507,769 from $406,039. Miami-Dade County’s existing home prices jumped 13 percent in the 12-month period, while Broward County homes rose 12.8 percent.
To be sure, high-end sales tend to skew the average prices, but data show price appreciation across all markets. The median list price for existing homes in February in Miami was $290,000, up 5.5 percent from a year ago, according to the National Association of Realtors. In West Palm Beach-Boca Raton, the median list price leaped 14.2 percent, to $265,000, NAR data show. In Fort Lauderdale, the median listing rose 8.4 percent over the year, to $189,777.
“The market is being driven by really basic fundamentals of supply and demand,” Douglas Elliman Florida CEO Jay Parker said. “There is simply not a lot of inventory and sellers are being aggressive.”
While the inventory of existing homes across South Florida did actually increase 17.8 percent year-over-year in the last week of February, according to Condo Vultures, it’s still low historically and brokers report demand outpaces the supply growth.
“I think we are seeing a strong and sustainable market,” Parker said.
Brokers also noted a difference in buyer demographics. New construction buyers tend to be international investors purchasing a vacation property, who are able to wait while the building goes up. Existing homebuyers, especially those purchasing single-family properties, tend to be domestic full-time South Florida residents.
“New construction inventory, generally speaking, requires a 50 percent deposit, and that is a year and a half before you can take occupancy of the property,” said Alicia Cervera Lamadrid, managing partner of Cervera Real Estate. “So for a lot of domestic buyers that is not palatable and many times it is not viable. If they are going to put that much money down, then they need to move into the property.”
Parker said many domestic buyers are moving from high-tax states, like New York.
“With the ability today to work from almost anywhere, we are seeing more and more buyers from New York flock to South Florida,” Parker said.
“New Yorkers are used to paying $3,000-to-$4,000 per square foot, and for them to come here and pick something up for $2,000, or even $3,000 on the luxury end, it’s a bargain,” he maintained.
Top existing home sales
In February, Palm Beach County also dominated South Florida in terms of the priciest existing home sales, with the top five sales totaling about $74.5 million, compared with $60.4 million last year.
The largest resale deal in Palm Beach County, and all of South Florida, through the end of February was the $25.5 million trade of 120 Jungle Road. The 18,000-square foot mansion was sold by Silver Lady Palm Beach of Dublin, Ohio, which had Mark Brentlinger identified as its managing member on the deed. The purchaser, Jungle Road LLC, listed the West Palm Beach office of law firm Gunster as the company’s mailing address. The three-story, six-bedroom home was built in 1926 and saw substantial renovations in the last decade. It was listed by Corcoran brokers Paulette and Dana Koch, with an original asking price of $30 million.
Miami-Dade ranked second in dollar volume, despite a year-over-year decline. The top five deals in the county this February totaled about $33 million, down from $37.5 million in February 2013.
Shelton and Stewart’s Tracey Spiegelman had Miami-Dade’s top resale in February at 720 South Mashta Drive, a 6,328-square-foot single-family home that sold for $9.8 million.
Finally, Broward County saw an increase to $27.9 million in total dollar volume of its priciest five home sales, from $26.4 million in Februay 2013. The largest resale deal of February was for $8.35 million at 2550 Del Lago Drive in Fort Lauderdale. The 12,147-square-foot, seven-bedroom, single-family home sits along the Cordelia River. Joy Triglia of Patton & Co. Realty had the listing.
“I think a lot of people who were sitting on the sidelines and saying, ‘Let’s see where the market goes. I don’t have to buy now,’ are now thinking, ‘If I don’t buy now, I’ll get priced out of the market,’” Parker said.
“I see values continuing to rise,” he added. “There is not a lot of developable land in South Florida, which is making our market robust, opportunistic and more stable than it has ever been.”