September 2012 saw the priciest home sale in Florida history, with the sale of 3 Indian Creek Drive at $45 Million. Few can believe that the Florida housing market is experiencing such a quick recovery and how rapidly it has turned into a Seller’s market again. But the proof is in the listings. Take for example the following:
4 Tahiti Beach Island Road currently listed at $30,000,000.00 or 41 Arvida Parkway in Gables Estates listed at $27 Million and 9151 Arvida Lane in Gables Estates listed at $18 Million.
Are we safe to assume that South Florida is out of the woods and back to the 2005 home sales era? Well that’s just whats happening is some of the nations most competitive and sought after housing markets such as Coral Gables, Pinecrest and Coconut Grove. Sales of upper high-end properties are booming in the double digit figures, with tight supply driving prices of highly desirable prices skyrocketing and creating bidding wars (who ever thought we would use that word again so soon).
So what is driving the prices high and creating this Seller’s market? Well, across the nation there are various explanations. But, in South Florida, a few come to mind.
1. Turmoil in Europe and South America. The luxury market is clearly being driven and often times kept afloat by the flurry of foreign investors seeking to place their capital in a safe environment. Countries such as Brazil, Venezuela, Argentina, as well as now shaky Europe. These investors are coming in droves and pouring their money here, be it individual investors or by pooling their capital through LLC’s and seeking EB-5 Visas for automatic residency. Cities such as Coral Gables, Miami and Pinecrest are reaping the rewards of foreign global financial markets that have been thrown into chaos such as Europe. Paul Bishop, Vice President of Research at the National Association of Realtors agrees. “foreign buyers are very active for many of the same reasons domestic buyers are”. “Assets in the U.S. including real estate, look pretty appealing as opposed to other parts of the world”.
2. Financial Flexibility. Buyers that are considering large purchases, are generally borrowing at very low interest rates, or have the liquid cash on hand. And what better place to invest then a recovering real estate market, that will offer a return on investment far exceeding any national institution.
3. Perception of Value. Even at the very top of the real estate market, buyers still want to ensure that their money is being invested correctly. This means that once savvy home buyers who were holding off in prior years, now are seeing the market recovering. And the recovery is blazing. While years previous have shown large declines, luxury home buyers seem to think, as do market professionals, that the luxury market has seen its worst and is now headed to the top once again. Therefore, the time to buy is now before prices get any higher.
4. Low Inventory. Many seeking high end homes in either Gables Estates, Cocoplum, Old Cutler Bay, Star Island and other secluded sectors, have found inventory dwindling. So when a house goes on the market, the high end buyers are jumping on it. “Take for example, the recent sale of Pat Riley, former Miami Heat Coach’s pad” says Jacqueline Salcines, Esq. with the Law Offices of Jacqueline A. Salcines, P.A. “This luxury home recently sold for $16.8 million and it is reported that the buyer intends to demolish the current structure and build anew”. This was unheard of in the recent South Florida real estate market but truly a sign that the market has taken a turn for the better and is recovering at record speed.” What better proof than the boom in condominiums going up in the Downtown, Brickell and South Beach area. “Being of Argentinian decent, I can definately attest to the fact that … the Argentinians are coming in swarms” says attorney Jacqueline A. Salcines, Esq.
All said, what is one to expect in the coming months? “If my 15 years experience in the housing market and practicing real estate law serves as a guide, we will see a continued influx of foreign investors, Brazilians, Argentinians, Venezuelans, and perhaps a few new ones, Russians, Italians, all looking to reap the rewards of a stable and blazing hot real estate market.” South Florida is the poster child of a quick recovery and I am honored and excited to be a part of it.” -Jacqueline Salcines, Esq.
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