Waterfront homes in Miami Beach seem to be everyone’s target prize. Luxury-home sales in the area rose 43% this first quarter of the year. The luxury segment is outperforming the affordable segment by almost 10%.
So, what is the reason?
The answer is simple, wealthy New Yorkers are relocating to South Florida.
Long distance moving is now easier than ever with moving companies using technology to facilitate relocations. 30% of Florida’s’ inbound long distance moving this year is coming from Manhattan and the Greater New York Area.
The Miami Beach luxury housing market has never seen such an increase in prices in such a short period. Just look at Miami Beach real estate for sale and you will see how high the average price of a home is today.
The median luxury price of a home in Miami Beach is now a whopping $2,900,000. This median price is lower only to 4 cities in California (Los Angeles, San Diego, San Francisco and San Jose).
A quick search of Miami Beach waterfront homes can show how much prices have skyrocketed. Just a few years back we saw a record sale in Miami Beach for $47,000,000. That record has since been shattered twice. In the past luxury waterfront homes were being offered under the $15 Million mark. Now we see more than 7 active listings in Miami Beach being offered at over $30 Million.
This past quarter we have seen a total of $800,000,000 sold in Miami Beach waterfront homes alone. 8 of the top 15 sales have been to a rich New Yorker relocating to Miami Beach.
Inventory is down 50% from last year and sales have almost doubled.
Look at the chart below:
Why are New Yorkers relocating to Miami Beach?
- The ultra-luxurious quality of Miami Beach real estate
After the housing crash of 2008 and with all the construction problems of the time developers have learned their lesson. Homes are being built with the best quality finishes and therefore appeal to the most discerning of buyers. These buyers are willing and able to spend exorbitant amounts of money in housing.
Just look at the top 6 waterfront homes for sale in Miami Beach and you will see what $35,000,000 can buy.
- The low prices of homes (compared to New York City)
Most luxury homes in Miami Beach sell in between $2,000-$3,000/sqft. Those amounts are still nothing compared to New York luxury real estate.
- Low Taxes
Florida has one of the lowest tax burdens in the nation. It does not have a state income tax, inheritance tax or intangible tax. Take a quick look at this Florida tax guide.
- Cost of Living
The cost of living in Miami is 23% lower than in New York. It essentially means that for every dollar that you have in Miami you would need close to $2 in Manhattan.
Florida is the Sunshine state and rightfully so. The average high temperature in Miami is 87 degrees and the lowest 73 degrees. That means that in Miami you have an average of 80 degrees all year round.
By: David Carrion-Levy, Realtor – Compass