Why is Luxury Real Estate in South Florida in High Demand?
The pandemic has driven up demand for luxury property from northern buyers seeking shelter in South Florida.
The allure of sunshine and sand along South Florida’s coast has long been a draw for Northerners seeking to retreat to a warmer climate, but the migration south is heating up due to COVID-19, with buyers scooping up real estate and making the decision to permanently call Miami home.
Royal Palm Residences - Courtesy One Sotheby’s International Realty
“Miami has always been one of the most desirable places to live in the world,” said Chad Carroll, a leading broker with Compass who relocated to South Florida from New York in 2008. “From an affordability standpoint, you get more space and better quality real estate at any price point when you compare to New York inventory. From a lifestyle standpoint, there is nothing else like it.”
580 Sabal Palm - Listed by Chad Carroll with Compass
According to the ISG World Miami report, nearly 1,000 people move to Florida every day, with many heading for coastal cities including Miami. New contracts and closings for single family homes have surged in the past few months, with home sales in some parts of the state even doubling. According to One Sotheby’s International Realty, in the second quarter of 2020, Miami Dade single-family home sales in the $5 million plus bracket saw a jump by 43%, proving a stunning demand in the luxury market.
“Our latest data analytics for Miami Beach, Bal Harbour, Bay Harbor Islands, and Greater Miami shows an over 300% traffic increase when compared to the same period last year,” according to Allan Kleer with One Sotheby’s International Realty.
Real estate agents say that many of those moving here from high tax states like New York, New Jersey, Illinois and Connecticut are drawn in by the lifestyle, affordability and tax benefits. Florida residents pay no state income or estate tax, receive a homestead exemption of up to $50,000, and a 3 percent annual cap on home assessments. Recent high-profile transplants include billionaire businessman Carl Ichan and Leon Cooperman.
“A lot of people were on the fence considering the move because of the monetary benefits, now the pandemic has accelerated their decision to establish permanent residency,” said Carroll. “They are desperate to escape the lockdowns and retreat to a city with less congestion.”
3630 N. Bay Homes Drive - Listed by Chad Carroll with Compass
The flexibility to work remotely, along with the shift to kids attending school virtually, has allowed people to test drive living in South Florida. Many started off renting, and decided to stay permanently.
“The majority of people are looking for a very similar type of home and existing inventory of waterfront homes is limited,” said Kleer. “We specialize in waterfront properties and our buyers want to live somewhere with plenty of outdoor space to stay safe and socially distanced. A pool and dedicated home office is now highly desired, and other luxury amenities including in-home gyms, summer kitchens and outdoor entertainment spaces are most important to buyers.”
With winter on the way, agents expect to see a continued surge in demand from those seeking shelter from the cold and a potential spike in COVID cases during flu season.
“Miami Beach is the new Hamptons,” said Minette Schwartz with The Schwartz team at Compass. “New Yorkers want a place where they can escape, especially during the winter. More and more people are choosing a change of scenery.”
According to Schwar tz, while single-family homes are in highest demand, interest in the condo market remains s trong, with a shift in demand for rentals and sales in lower density buildings.
QUINT Collection Hollywood - Listed by Chad Carroll with Compass
“Buyers are primarily interested in boutique buildings with less than 100 units,” said Schwartz. “They want full-service buildings with beach service, valet to help with groceries and packages, and an inhouse restaurant so they can shelter in place with minimal contact, if needed. With quarantine and work from home these buildings are becoming strong communities because neighbors are spending more time together at home.”
Royal Palm Residences, a boutique new development in Boca Raton says more than 30% of their buyers are from Chicago, noting that the proximity to the beach, concierge, expansive outdoor terraces and only 16 residences per tower as being the biggest draw.
“We sold one of the residences to a couple from Chicago completely virtually,” said Nunzia Alvergue with the Royal Palm Residences sales team. “They were not able to travel to Boca due to COVID, so I did a FaceTime tour and they fell in love.”
QUINT Collection in Hollywood is catering to buyers who are seeking more seclusion and an outdoor, waterfront lifestyle – offering townhomes starting at $2.5 million with private rooftop sky decks and marina slips for their residents.
“It’s all about having space, and there is a limited amount of it,” said Schwartz. “With more and more companies and people relocating here, Miami has enough momentum to keep pushing forward and I think we will see property values continuing to rise.”