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by , October 21, 2020
Condo Blackbook's exclusive 3Q 2020 analysis of Miami's luxury condo market shows that this segment of the residential real estate market, like single-family, is mounting a strong recovery from any initial COVID-19 pandemic effects. Sales recovered to post the strongest third quarter since 2015. Why? First off, Miami continues to be a desirable city for those moving from high-tax states. Additionally, companies allowing employees to work remotely just made it easier for those who've always wanted to escape extremely cold winters or relocate to a city with a beach lifestyle.
Secondly, Condo Blackbook's 3Q 2020 analysis shows that luxury condos in Miami are in high demand, particularly in Edgewater, which posted a 114% year-over-year growth in sales. Contrary to what most market experts had predicted about buyer focus shifting to single-family homes due to the pandemic, the high sales volume reported this quarter shows that Miami's luxury condos are in strong demand with buyers.
Read on for more data about how prices, days on market and inventory trends have changed as the market is emerging from the effects of the pandemic in our full-length Q3 2020 Miami Luxury Condo Market Report below:
This luxury condo market report only features properties priced $1 million and above, and covers the neighborhoods of Greater Downtown Miami (inclusive of Edgewater and Brickell), Miami Beach (inclusive of Surfside, Bal Harbour, Sunny Isles Beach and Fisher Island) as well as Coral Gables and Coconut Grove.
Overall Miami Luxury Condo Market Summary - 3Q 2020 |
||
Quarterly sales up by 9.6% YoY |
Overall luxury condo price/sq. ft. increases by 3.3% YoY |
Inventory levels reduce, but buyers retain advantage |
3Q 2020 Overall Miami Luxury Condo Market Highlights
Overall Miami Luxury Condo Quarterly Market Summary - Fig. 1.1
Quarters |
Number of Sales |
% change in Sales |
Median Sale Price |
% change in Median Sale Price |
Median Sp/Sqft |
% change in Median Sp/Sqft |
Median of DOM |
Q3 2020 |
182 |
9.6% |
$1,805,000 |
9.6% |
$771 |
3.3% |
158 |
Q3 2019 |
166 |
$1,646,500 |
$747 |
152 |
Sales rebound to strongest Q3 since 2015. Even with the pandemic unsettling market dynamics for the first half of the year, it's exciting to see Miami luxury condo sales make a strong comeback this quarter. Reporting a year-over-year increase of 9.6% against Q3 2019, sales are at their highest in a third-quarter since 2015 (Fig. 1.2).
A closer look into the Monthly Sales Chart (Fig. 1.3) reveals that the market gathered more steam towards the tail-end of the quarter. While July started out slower with 55 sales compared to last year's 65, August picked up momentum with 57 sales compared to 2019's 45 sales, and September posted an amazing 70 closed sales compared to last year's 56.
Now, even though part of these sales likely represent deals that were held back in Q2 due to the global lockdown (as predicted in our Condo Blackbook Q2 report here), there is ample momentum to conclude that the market is catching up and getting back on track. This remarkable progress can also be seen in the 12-month Sales Trendline (Fig. 1.4) that has finally corrected from a negative position (in the first and second quarters) to a flat line in Q3.
Still, we will be keeping a close watch on the next quarter's performance, which is going to be critical to declare whether the Miami luxury condo market has made a full recovery from the pandemic-caused disruption or not.
Overall Miami Quarterly Luxury Condo Sales 2015 - 2020 - Fig. 1.2
Overall Miami Monthly Luxury Condo Sales Jan. 2016 to Sep. 2020 - Fig. 1.3
Overall Miami 12-Month Luxury Condo Sales with Trendline - Fig. 1.4
More details available, including quarterly data, in the dedicated reports for Greater Downtown Miami, Miami Beach and the Barrier Islands, plus Coral Gables & Coconut Grove.
Miami Luxury Condo Neighborhood 3Q20-over-3Q19 Sales Comparison - Fig. 1.5
Price/sq. ft. up 3.3% at $771, Median Price up 9.6% Year-over-Year. The trend of higher year-over-year prices continues into the third quarter of 2020. (Price per sq. ft. for the first two quarters was higher compared to the same quarters in 2019. See Fig. 2.1 below).
Overall, the Price per Sq. Ft. for luxury condos increased 3.3% from $747/sq. ft. in Q3 last year to $771/sq. ft. this year (Fig. 1.1). However, the peculiar peak (of a 10% quarter-to-quarter increase) seen in Q2, settles down this quarter.
The Median Sales Price also increased (9.6%) from $1,646,500 in Q3 last year to $1,805,000 in Q3 this year.
Overall Miami Luxury Condo Quarterly Price per Sq. Ft. 2016-2020 - Fig. 2.1
Median Price per Sq. Ft. (Fig. 2.2.1)
Median Sales Price (Fig. 2.2.2)
Miami Neighborhood 3Q20-over-3Q19 Median Price per Sq. Ft. Comparison - Fig. 2.2.1
Miami Neighborhood 3Q20-over-3Q19 Median Sales Price Comparison - Fig. 2.2.2
Below is a detailed analysis of how prices added up on the basis of age of construction for luxury condos in Miami, categorized as new construction buildings (2015-2020), buildings built from 2000-2014, and pre-2000 buildings.
Sales volumes are back up in Q3 for this newly built section. Posting a record-high number of sales for a quarter (in the entire period under review); this segment reports a 43% increase year-over-year and 130% increase over the previous quarter (Fig. 2.3).
The Price per sq. ft. for this segment increased 21% year-over-year, while the trend remained flat quarter-over-quarter. At $948/sq. ft., the price trends in the mid-range of median prices traced over the past five years (Fig. 2.4).
Overall Miami Luxury Condo Sales for Buildings Dated 2015-2020 - Fig. 2.3
Overall Price per Sq. Ft. for Buildings Dated 2015-2020 - Fig. 2.4
Again, after a short hiatus in Q2, sales make a strong comeback with an impressive 74% increase quarter-over-quarter and 10% increase compared to the same quarter last year (Fig. 2.5). The median price per sq. ft. too posts a 7% increase year-over-year, closing at $761/sq. ft. (Fig. 2.6), and showing good value for sellers.
Overall Miami Luxury Condo Sales for Buildings Dated 2000-2014 - Fig. 2.5
Overall Miami Price per Sq. Ft. for Buildings Dated 2000-2014 - Fig. 2.6
For Miami's older luxury buildings, sales declined 15% year-over-year. However, they were up 44% quarter-over-quarter and outperformed the sales reported in the third quarter for years 2015-2018 (Fig. 3.8).
On the other hand, the median Price per sq. ft. in this seasoned segment was down 16% year-over-year and 7% quarter-over-quarter at $636/sq. ft., showing a good window of opportunity for buyers.
Overall Miami Luxury Condo Sales for Buildings Dated 1921-1999 - Fig. 2.7
Overall Miami Price per Sq. Ft. for Buildings Dated 1921-1999 - Fig. 2.8
Days on Market increase 46% quarter-over-quarter. With the pandemic-related lockdowns delaying plenty of deals, it is quite expected for the days on market to climb when sales for such properties finally close. This, most likely, is what has increased the days on market for luxury condos by 46% between Q2 and Q3.
Luxury condos spent 50 more days on market in Q3, when compared to Q2, and 6 more days compared to the same quarter last year (Fig. 3.1). What's worth noting is that while the sudden spike in quarter-to-quarter days on market could be attributed to the pandemic, the metric is stable year-over-year, showing that buyers-seller communication is not worse off a year forward.
Overall Miami Luxury Condos Quarterly Days on Market 2018 - 2020 - Fig. 3.1
Miami Neighborhood 3Q20-Over-3Q19 Days on Market Comparison - Fig. 3.2
Q3 2020 closes with 51 months of inventory. As the Miami luxury condo market shows signs of a recovery, the months of inventory also began to normalize after peaking in Q2 2020. New deals plus closings from the previous months (stalled only due to the pandemic) give ample momentum to bring the trend down by 10% quarter-over-quarter.
However, closing Q3 at 51 months, inventory is 38% higher year-over-year and still a long way off from reaching its ideal of 9-12 months. This is to be expected, since inventory calculations are based on the last 6 month price trends and Q2's progress was interrupted by the pandemic. We almost certainly will see inventory levels drop in Q4 and again in Q1 2021.
In the meantime, buyers still have the upper hand in negotiations and have an extended period to find the best deals possible. Search here for luxury condos for sale in Miami.
Overall Miami Months of Luxury Condo Inventory from Mar. 2019 to Sep. 2020 - Fig. 4.1
A balanced market has only 9-12 months of inventory. The months of inventory are calculated as the number of active listings + number of pending listings divided by the average number of deals in the last 6 months.
Miami luxury condo market shows signs of recovery, though current trends still favor buyers. It is refreshing to see the market start gain strength this quarter, as Q2 absorbed the most of the negative impact from the pandemic.
Overall Miami luxury condo sales in Q3 2020 improved strongly year-over-year. Coupling this with the positive indication from the 12-month sales trendline (which flattened after two consecutive quarters of a negative trend), plus the high demand we currently see in the market, it's easy to say that we are in a surprisingly early market recovery bounce, which most likely will carry into Q4 2020 and Q1 2021.
As predicted in our Q2 Miami Luxury Condo Report, Edgewater has made an early, and astounding recovery, posting the highest year-over-year growth in sales for all the neighborhoods in our report.
Additionally, Mid/North Beach, Sunny Isles Beach, plus Greater Downtown Miami posted a complete turnarounds from their negative numbers in the previous quarter to higher year-over-year sales this Q3.
Both the Sales Price and Price per sq. ft. also posted year-over-year gains, reflecting that sellers are getting good returns for their luxury condo investments in Miami. Properties in the combined Surfside and Bal Harbour neighborhood posted maximum gains in year-over-year value, followed by Edgewater, Greater Downtown Miami plus Coconut Grove & Coral Gables.
While overall inventory was expectedly up, simply because the trend considers average activity in the past 6 months, we strongly expect levels to go down over the next two quarters, at least. However, for now, buyers have the advantage of extended time and options, until inventory bounces back to pre-COVID levels and lower, which they can use to their advantage as they look for luxury condos for sale in Miami.
With only one quarter left until the end of 2020, expecting a reversal in the current buyer-friendly cycle is unlikely. However, if the market maintains its pace next quarter, which it most likely will, we can reasonably expect trends to normalize to pre-COVID levels relatively soon.
Additionally, the following factors will influence Miami's luxury condo market over the remainder of the year:
COVID-19 after-effect -- Miami a stronger favorite. While the pandemic may have stalled buyer plans in Q2, the third quarter saw all of that pent-up demand come through. We are also seeing increased demand from:
Presidential Elections. The 2020 Presidential election still remains a wild card as we get closer to election day. Historically, Presidential elections have always put a pause on real estate transactions. However, what remains to be seen is how much of an impact will that pause have on sales and inventory.
Inventory Correction. Even as the buyer's market cycle has been extended naturally (due to COVID-19), we expect to see a correction soon. With high luxury condo demand and fewer pre-construction deliveries in the new future, inventory will continue coming down over Q4 2020 and Q1 2021 - offering a very positive outlook for the market in Miami.
If you'd like more details on the data in our exclusive Condo Blackbook quarterly luxury condo market reports, please send us an email or give us a call anytime.
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