This article by OPP Connect editor Adrian Bishop was originally posted on OPP Connect.
Prime property in Miami Beach is fetching up to $50 million, says an international agent.
Miami image via Shutterstock.
Overseas buyers from Latin America, who are looking for secure investments are most active, says the Engel & Völkers agency.
Thanks to rising prices and sales, Engel & Völkers in Miami had a record financial year. The E&V shops in Miami Bal Harbour, Miami Beach, Miami Brickell and Miami Key Biscayne secured sales in 2013 worth $300 million, up 150 percent from 2012.
Oliver Ruiz, managing partner at all four shops, explains, "The property market in Florida and in the USA as a whole has recovered considerably from the financial crisis. At the same time, the upturn on the market in Miami has been even faster and stronger than on most other U.S. submarkets."
The most striking sign indicative of the market's stability in Miami is the consistently high level of international demand, with most foreign investors being cash buyers.
The market for premium residential property in Miami is dominated by buyers from Latin America, particularly Venezuelans and Brazilians. "For many South American buyers, the main motivation for purchasing real estate in the USA is their intent to make a secure investment," Ruiz said. "The stable political and economic climate in the country makes it an appealing location for investments.
"Miami attracts especially strong interest here, acting as a hub between South and North America," Ruiz added. Alongside South America, international buyers come for the most part from Russia, China, Italy, France, Peru, Ecuador, Argentina, Mexico, Canada and, occasionally, from Germany as well.
Most international buyers are looking for freehold apartments and mansions right by the ocean at prime addresses in Brickell, South of Fifth (SoFi), Miami Beach and Sunny Isles, valued at upwards of $1 million.
Prices for an exclusive freehold apartment in Brickell are between $400 and $600 per square foot. Prestigious homes in SoFi and Sunny Isle homes fetch $1,500-$3,000 per square foot, and high-rise towers on the beach cost from $6 million to $30 million.
In exceptional cases, extremely high-end new residential developments in Miami Beach right on the oceanfront are being sold for as much as $50 million. The most well-known and sought-after locations in Miami Beach include the Art Decó District in South Beach. In addition, the exclusive neighborhoods Bal Harbour, North Bay Road, Palm Island, Star Island, Venetian Island and Sunset Island are extremely desirable.
South of Miami Beach lies Key Biscayne, another small island just off the main coastline, which offers an appealing mix of grand freehold apartments and lavish beach houses. It is home to a particularly large number of families. A detached waterfront home here costs at least $10.5 million, and freehold apartments fetch $1.5 million to $5 million.
In addition to an absolutely superb location, the most important criteria for purchase include the latest technical standards in security systems, lighting, windows and entertainment facilities such as a private home cinema, as well as a wine cellar and -- in the case of apartment complexes -- affiliated gourmet restaurants.
Premium properties going onto the market in Miami's best locations receive several offers to buy within a very short time, as availability of homes is short and the desirable new developments are usually sold off-plan.
Developers are stepping up their building activities to meet the strong demand from wealthy clientele based abroad for the most exclusive properties, but they cannot keep up the pace, which is driving prices even higher, says Engel & Völkers.
Property prices look set to keep on rising, Ruiz forecasted. "The market recovered extremely quickly in the wake of the crisis and has been undergoing growth ever since. Buyers and investors from around the world are fueling this remarkable reinvigoration of the property market and this means that it is set to remain a growth market in the long term too."
The picture shows an exclusive, nine-bedroom and eight-bathroom, 18,091-square foot villa in Key Biscayne, which is on sale through Engel & Völkers at $19.8 million.
Florida's median sales price for single-family existing homes in February 2014 was $165,000, up 10 percent from a year ago, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The median price for Florida townhouse-condos was $132,500, up 15.2 percent annually.
Florida Realtors President Sherri Meadows, who is also CEO and team leader of Keller Williams Cornerstone Realty, says, "With a diminishing number of distressed properties listed for sale, the return of more traditional housing market conditions continues to spark sellers' interest. Statewide, new listings for single-family homes in February rose 11.6 percent year over year, while new townhouse-condo listings rose 4.2 percent.
"And last month's statewide data showed rising median sales prices for both single-family homes and townhome-condo properties, year over year -- for the 27th month in a row."