“If you are thinking of buying, buy now. If you are thinking of selling, sell now.”
That was the bottom-line advice last Wednesday from Ron Shuffield, President and CEO of Berkshire Hathaway HomeServices EWM Realty, during a BHHS EWM Realty-sponsored webinar titled “The South Florida Market in the First 74 Days of 2021.”
Author of the 76-page 2021 Q1 Realty Insight report, which covers the South Florida real estate industry’s market for nearly the first quarter of 2021, Shuffield shared the impacts the Covid-19 pandemic had on the market, the current trends, and what we are likely to see.
And what we have seen so far “simply defy what anyone could have predicted pre-Covid, particularly in the luxury markets.”
The numbers are staggering.
In Key Biscayne alone, the Realty Insight report shows sales of over $2 million single-family homes climbed 380% since last year (during the first 74 days before the pandemic took hold), accounting for 83% of all home sales in that market.
When it came to Key Biscayne’s sales of over $2 million condos, sales were up 100% through the first 74 days this year as compared to that time period in 2020.
The under $2 million market for condos on Key Biscayne also has been a big target for buyers this year, with sales rising 115% and accounting for 88% of all condo sales in that market.
“Key Biscayne, for many years, was long considered a resort, and still is,” Shuffield said. “Many were part-time residents, but now we’re seeing more permanent residents. They’re seeing the convenience of living on the Key, being able to go shopping (and working) just a short distance from living on what I call a private island.
“This is a jewel, and it shows that we’ve had significant increases (in buyers and price points) ... the Key is probably one of the brightest spots we have on the charts.”
So, who’s buying? Well, the report shows Florida’s population is growing at 661 “net” new residents per day, although 16 of the 50 states are actually losing population.
“Whether it’s baby boomers who are retiring ... I saw one report that said 13.5 percent of all retirees are moving to Florida,” Shuffield said.
One big win for those new residents Is that Florida is one of just seven states with no state income tax. Florida also has no inheritance estate tax.
Among the areas where buyers are coming from: New York, California, New Jersey, Mexico, South America and Europe, which still has Covid travel restrictions in place.
Shuffield points out that the high-end sales can be a boost to the local economy with buyers coming along with relocating companies that bring, in turn, higher-paying jobs.
In fact, he said, clients who are buying $10 million-plus homes are “mostly domestic buyers.”
“We’re seeing a lot of them are younger buyers, executives with tech companies. If you can choose where you want to work ... you can see how attractive it is,” Shuffield said, pointing to a photo of the Aventura area that popped up on the screen during the webinar. “We are attracting some very wealthy people.”
Berkshire Hathaway HomeServices EWM sells a $1 million-plus single-family property “every 19 hours,” Shuffield said.
“Certainly, we cannot continue at this pace forever,” he said, regarding the current spike in sales, “but until we exhaust (this supply period) ...”
Looking at the statistics
The Realty Insight report is loaded with eye-opening statistical analyses. For instance:
The median sold price for a single-family home in the first 74 days of 2020 in Miami-Dade County was $373,000. For the same time period in 2021, the median escalated to $455,000, roughly reflecting a dramatic 25% increase. However, Shuffield pointed out, as of April 13, 2021, that median price has soared to $538,000.
Basically, Shuffield pointed out, $300,000 single-family homes in Miami-Dade County have virtually dried up. Recently accounting for 56% of all sales, now $300,000 or less homes make up just 10% of all sales.
In Broward County, the median sold price for single-family homes is now $455,000.
In the first quarter of 2020, sales of single-family homes priced over $1 million represented 1 of every 12 homes sold in Miami-Dade County. But, for the first 74 days of 2021, 1 of every 5 homes being sold were in excess of $1 million.
As far as million dollar-plus condo sales in the county, it was 1 out of 17 in the first quarter of 2020, but this year it became 1 out of every 9 during the first 74 days.
The inventory supply for single-family homes less than $1 million in Miami-Dade County shrunk to 1.9 months of supply, compared to 5 months of inventory during the same period in 2020.
“We’re usually happy to see 6 to 9 months of inventory,” Shuffield said.
As far as the condo market, there was 7.6 months of supply in the overall setting for Miami-Dade County, but the high-end level (over $3 million) showed dramatic changes, with the inventory dropping to 16.2 months, compared to 71.4 months of available inventory during the same period in 2020.
In perspective, an average of 41 condos priced in excess of $3 million were sold each month across Miami-Dade County during the first 74 days of 2021, compared to an average of 11 per month in that timeframe in 2020.
The same trend holds true in Broward County with condos $1 million or more.
“People are feeling comfortable getting back into condos (since the height of the pandemic),” Shuffield said.
Included in the Realty Insight report is a story on “Why owning a home is better than renting.”
Also, how a 1% increase in the mortgage interest rate can change the scope for buyers with the loss of buying power.
Incidentally, the posted interest rate by FreddieMac for a 30-year fixed mortgage in February 2021 was 2.81%. Just 10 years earlier, that rate was 4.95%.
Back in 1981, Shuffield said his company actually made deals with 18.6% interest rates, while in January 1995, rates were at 9.2%.
Pages of statistical comparisons of sales between the first 74 days of 2020 and the first 74 days of this year are included for Key Biscayne, Brickell, Miami Beach, Fort Lauderdale, Aventura, Coral Gables, Sunny Isles Beach, Pinecrest and Palmetto Bay, in addition to the neighboring counties.
Click here to access your free report or call Vivian Galego-Mendez, BHHS EWM Realty VP and Broker for Key Biscayne office at 305.205.2626 or email Vivian at email@example.com