The South Florida real estate market, which has swept away the sluggish performance of previous years, is now in a white-hot development trend, mainly because buyers are tired of the protracted epidemic and are more eager to move to areas with better climate and lower taxes.
Listing prices for high-end South Florida homes rose about 14% between 2020 and 2021, according to data provided by real estate portal Realtor.com. The median listing price in South Florida's luxury market (defined as the top 5% of listings in Miami-Dade, Broward, and Palm Beach counties) in the year to November 2021 was 293 Ten thousand U.S. dollars. Inventory of luxury homes plummeted during the period, with the number of listings for sale with asking prices over $1 million down 26.1%.
"Factors such as the tax environment, natural climate, cost of living and outdoor space are driving buyer demand, driving up prices," said Hannah Jones, an economic research analyst at the site.
Nonetheless, there is still a chance for potential homebuyers looking to enjoy dreamy waterfront living while meeting telecommuting requirements to find a good deal. Across the southern peninsula, it’s not hard to find popular properties with good quality and good prices, and some communities are poised for a boom, but prices are still relatively modest, experts say.
While first-tier markets such as Miami and Palm Beach will continue to account for the lion’s share of luxury transactions, buyers who have relocated from major metro areas but are accustomed to the conveniences of big cities are beginning to look to smaller communities and suburbs close to urban amenities.
Daryl Fairweather, chief economist at real estate agency Redfin, said: "It has become a general trend that smaller cities have grown in popularity in the wake of Covid-19."
"Many of these communities are on the west side of the peninsula, between Tampa and Fort Myers," she said. "If you're looking for a waterfront home, Florida's Gulf Coast offers a more cost-effective option."
Seven of the top 10 most popular neighborhoods are from the Sarasota metro area, according to a Redfin analysis of year-over-year home search growth in U.S. zip codes. In the third quarter of last year, the Sarasota metro area was eighth on the list of the most popular relocation destinations for buyers.
South Sarasota, the hottest zip code, had a median sale price of $434,023 in September 2021. "It's a very affordable price point for homebuyers looking to set up a home on Florida's waterfront," Fairweather said.
Buyers can choose from upscale million-dollar condos overlooking the ocean to new luxury villas closer inland but just a mile from the beach. "In Miami, a property of the same caliber could be more than double the price," she said.
One of South Sarasota's selling points is its proximity to Siesta Key, a crescent-shaped barrier island facing the Gulf of Mexico, filled with luxury beachfront residences.
But at the same time, South Sarasota also has growth potential. In 2021, the median sales price in the region is up 19% year-over-year, with more than a third of listings selling above the listed price.
There are many other fast-growing markets around Sarasota. In East Venice, a retirement mecca, the median sale price was $420,000, up 38% from a year earlier. The median sale price is $427,500 in less-populated Englewood, an area with a premier beach and relatively affordable waterfront homes, with a 38 percent annual growth rate.
"We expect the overall housing market to slow in 2022 with higher mortgage rates, but thanks to telecommuting policies and a flood of buyers into more affordable suburbs," Fairweather said. The area is likely to remain attractive."
In Lee County, further south on the Gulf Coast, some areas are emerging as popular home-buying destinations. As one of the fastest-growing counties in southwest Florida and in the nation, Lee County has added about 142,068 people over the past decade, according to 2020 U.S. Census data.
Bonita Springs in Lee County and Naples in nearby Collier County have long been popular with high-end buyers. In November 2021, the average selling price of a home in Bonita Springs surged 51% from a year earlier to $941,351, according to real estate agency Premier Sotheby's International Realty, while the average sale price in Naples rose 17% from a year earlier to $80 $2957.
But recently, buyers have begun to look for quality and affordable luxury properties in other parts of Lee County. Premier Sotheby's International Realty is targeting the village of Estero, south of Bonita Springs, and Cape Coral, Bonita Springs-based managing agent Erin McDonald. Coral), Fort Myers, and Fort Myers Beach.
McDonald points out that while home prices in these neighborhoods don't skyrocket as quickly as other popular U.S. markets, they have been rising slowly and consistently over the years. As buyers are forced to flee the overpriced market, these more reasonably priced neighborhoods naturally find favor with high-end buyers looking for a value investment.
"The opportunity is here now, because we're starting to see these neighborhoods that were once dominated by lower-priced listings move closer to the luxury neighborhoods of Naples, Marco Island and Bonita Springs," she said. ."
Fort Myers, the largest city in Lee County, has one of the cheapest housing prices in the county, according to Premier Sotheby's. As of November 2021, the average selling price is $358,748, but that price point may not last long as it has risen as much as 32% compared to November 2020.
In neighbouring Estero Village and Cape Coral, house prices rose 25 per cent and 21 per cent, respectively, to $502,985 and $459,794 in 2021. By contrast, home prices in Fort Myers Beach grew more modestly, up 4 percent year-over-year to $647,135, but also saw a 25 percent increase the year before.
“Locals say southwest Florida has generally been undervalued for years and the market has been tepid, but the new influx of buyers seems to be seeing the value and enjoying it,” McDonald said. It’s a laid-back beachside lifestyle.”
She pointed out that housing stock is at an all-time low, while home sales are hitting new highs, which means there is no shortage of listings on the market, it’s just that they are snapped up quickly after they hit the market.
McDonald said the industry believes that the national real estate market will cool down in 2022, and that price growth will slow slightly. "We do feel that the market is entering a correction channel, but there is no need to worry about a housing bubble collapse similar to the 2000s," she said.
Real estate experts say the stretch between Palm Beach and Miami is the best option for buyers considering investing in South Florida's Atlantic coast.
This is certainly not the case in Broward County. The median sales price for luxury homes in the county in 2021 is $1.85 million, a cumulative increase of 17.5 percent from 2017, according to data provided by Realtor.com. By comparison, home prices in southern Miami-Dade County rose 26.7% to $3.8 million over the same period. In northern Palm Beach County, listing prices for luxury homes rose 24.9% over the period, reaching $4 million in 2021.
"These areas are a little different from the traditional luxury market, and they stand out mainly on the slow-paced suburban lifestyle, but with the growth of business investment, there are opportunities to develop in the future," Jones said.
In Hollywood and Pompano, two moderately priced markets, particularly local buyers from high-priced areas, Jones said. "Pompano Beach's growth appears to be particularly solid, with listing prices remaining at an annual average of 10.9 per cent since 2017," she said.
Pompano, with its well-maintained beaches and well-established golf and tennis facilities, has a median listing price of nearly $1.51 million for luxury homes in 2021, up 8.6% year-over-year. While few luxury developments have settled in Pompano Beach in the past, there is evidence that this is changing. "The Ritz-Carlton Group recently announced plans to build a new condominium project in Pompano Beach, expected to be completed and delivered in 2024, suggesting that corresponding luxury amenities may also be on the way," Jones said.
Luxury home listings in Hollywood have fallen slightly since 2017, but recent growth suggests buyer interest in the area is picking up. In the third quarter of 2021, Hollywood was the seventh most searched city by Miami residents, attracting 2.1% of search traffic, according to Realtor.com. "This partly reflects that the region is getting more attention and the market is likely to heat up soon," she said.
In Fort Lauderdale, Broward County's most populous city, luxury buyers still have an opportunity in the condo market, said Jonathan Miller, president and CEO of New York-based real estate appraisal firm Miller Samuel. Find a good deal, and prices for this type of property start at about $1.2 million.
But it's important to point out that demand is picking up quickly. "This segment saw the largest decline in supply as sales remained high," Miller said.
In the third quarter of 2021, inventory for sale in high-end Fort Lauderdale condos hit an all-time low of 152 units, a 60% drop from a year earlier. Miller was also responsible for writing the city's third-quarter home sales report for Douglas Elliman Properties.
"The condo market in Fort Lauderdale is booming, with sales cycles 72.5% shorter than a year ago and 70.6% faster than two years ago," he said.