The 2024 Douglas Elliman | Knight Frank Wealth Report Is Here – Tides Are Changing In Miami Posted on March 6, 2024March 8, 2024 by Sarah Elles Boggs The Douglas Elliman | Knight Frank Wealth Report is here again for the 18th year, and there is some very special news about the Miami luxury and ultra-luxury market. In the 2024 report, we see that Miami has hit an unmistakable inflection point. Change is upon us and there is no going back. So where are we headed? To browse the 2024 Douglas Elliman | Knight Frank Wealth Report in its entirety, you may click here for a free copy to download immediately. Out With The Old – Miami Has Changed It used to be that mentions of Miami Beach conjured up thoughts of Cocaine Cowboys and wild Spring Breakers. This is no longer the case. The Cocaine Cowboys days are now just a Netflix novelty and w hile the Spring Breakers are still interested in Miami, the sentiment is not shared. This shift has been in the works for years, with locals calling for a stop to the unhinged lawlessness. After a particularly wild season in 2023, Miami Beach introduced strict new guidelines for peak weekends in order to quell the interest. There was even a cute PSA that was released, letting Spring Breakers know that we are breaking up with them. The PSA and hefty guidelines seem to have been effective. According to Google Trends, Miami was the #1 searched city for Spring Break destinations in most of the United States, yet the season has been extremely peaceful this year. You can see on this live walking tour of the beach today, the sand is clean and everybody is relaxing. Now that we have made our point about having outgrown our past, we can embrace the future of Miami and Miami Beach. Luxury Competition The Miami Beach luxury real estate market has been on an upward trajectory for a few year (since COVID to be exact), but we are now entering into uncharted territory. Even billionaires now struggle to get a slice of the South Florida waterfront, according to the Wealth Report. Developers have been working tirelessly to keep up with the demand for sophisticated boutique developments in prime locations. While Miami Beach and Miami have long been havens for vacation properties, one of the main differences we are seeing is that buyers are searching for full-time residences. The world has learned that Jeff Bezos saved $600 million for relocating his home base to Indian Creek Island in Miami Beach. This is not an uncommon phenomenan. Kenneth Griffin relocated both his personal and professional headquarters to Mainland Miami, bringing thousands of hungry financiers with him. The Wealth Report indicates that driver’s license changes are up 78% in the first 9 months of 2023, an indicator of the volume of new Miamians we are gaining. Rendering of the Ritz Carlton/Sagamore South Beach Growing Pains The unprecedented growth of the Magic City has not come without pain. The single family market has cooled as buyers began to pull back from the demands of sellers, although growth was still pronounced. Our local infrastructure is also hustling to keep up with the demands. We brushed on this yesterday for 305 Day, speaking about the increased competition for a limited number of private school spots. In the meantime, UHNW parents are bringing their New York A-game in order to win a coveted spot for their students. Another growing pain is one that we cannot get around. Miami has only so much land, and what we do have is largely built-out. The only solution is vertical construction. This lack of supply will protect current pricing and force it to continue upward in the coming years. Future-Focused Strategy Because we are still early in the migration cycle, it is incredibly possible to reserve a property in the preconstruction phase and sell it once the development comes to fruition. Multiple investors have undertaken this strategy, whether they could not decide which project is a better fit or if they were strictly looking at the transaction for the upside potential in a trophy asset, and it pays. Griffin’s Citadel has not even completed the build-out of their temporary office space in the Brickell Financial District and we are still waiting for the first renderings of their permanent headquarters on Brickell Bay Drive. We like to use Citadel as an example as they are the largest and most public example of the financial migration, but there are dozens of similar companies that are coming along with them. Considering we have already experienced the growth that is well-documented in the Douglas Elliman | Knight Frank Wealth Report, this inflection point is a permanent trajectory toward a higher level of luxury and wealth in Miami. The Perigon Miami Beach Penthouse West Kitchen | Image Courtesy of MAST Capital To browse the 2024 Douglas Elliman | Knight Frank Wealth Report in its entirety, you may click here for a free copy to download immediately. If you, or someone you know, are interested in purchasing luxury real estate in Miami and/or Miami Beach, please contact Broker Michael Light, Founder/Owner of the Miami Luxury Homes Group at Douglas Elliman Real Estate, Global Ambassador for Knight Frank, Executive Director of Luxury Sales at Douglas Elliman and a member of its elite Sports & Entertainment Division. Michael has over 15 years of experience working with influential buyers from all over the world and is an expert on educating buyers on market statistics and trends. You may reach Michael directly on his cell phone at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.
Florida’s Real Estate Market Surpasses New York, Becoming The Second Most Valuable Market In The US Posted on September 29, 2023 by Sarah Elles Boggs The mass exodus from New York to Florida is showing in newly-released market reports conducted by Zillow. Florida has now surpassed New York to take the second place spot of Most Valuable Residential Real Estate Markets in the United States, trailing only behind California. Florida’s uptick in value has been credited with the population surge that began after the pandemic in 2021. New residents flocked in from metro areas including New York and Chicago. We have also seen a migration of new residents from the Connecticut area as savvy residents escape mounting taxes and search for a warmer climate. In order to offer housing for the new Floridians, the construction industry has been full-steam ahead with new condo towers being announced nearly every week. The value of Florida’s residential real estate now tops $3.62 Trillion in December 2022, ahead of New York’s $3.32 Trillion. In December of 2021, Florida’s real estate was valued at $3.01 Trillion and the number is continually growing. A Jump In Value While most of this value comes from the Miami market, eight of the top ten fastest growing metro areas in the United States were in Florida. The boom is statewide. Miami/Fort Lauderdale’s market value grew from $942 Billion in 2021, to $1.2 Trillion in December of 2022, a 23% increase year over year. Lakeland had the largest percentage of increase in the United States with a 25.3% growth. Their values came in at $82 Billion in December 2022. Top 10 States For Value In Residential Real Estate Markets | Image Credit: Zillow Declining States While California still holds the title of the most valuable real estate market with $9.52 Trillion in property values, they are also quickly losing momentum. Obviously, there is a long way to go for Florida to catch up. The California market is valued at close to the Florida, New York and Texas markets combined. With this being said, California’s recent policies that are not friendly to luxury real estate holdings and investors are scaring many of these purchasers out of the state. Even the Hollywood elite is relocating to places like Miami, Austin and Memphis. What’s To Come While it is predicted that home price appreciation is set to stagnate over the next year, this is on a national scale and is a response from the market to the rising interest rates and inflation. It is not predicted that Miami’s real estate market will stagnate as we are still experiencing “The Citadel Effect,” an influx of new executive-level residents from Chicago that are in the process of relocating to the Magic City. Ken Griffin’s move to Coconut Grove and subsequent commercial purchases in Brickell have also led to a contagion of tech firms and other financial institutions following suit. As construction has not even begun on Citadel’s new headquarters at 1201 Brickell Bay Drive, The Citadel Effect is anticipated to positively affect Miami’s real estate market for some time in the future, particularly in the Brickell/Downtown Miami/Coconut Grove areas. Top 10 Metro Areas For Percentage Of Growth In Residential Real Estate Values | Image Credit: Zillow If you need or want to move in the Miami area, or if you are searching for a real estate investment, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman, to discuss pre-qualification requirements. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com. Image Credit: InterMiami CF
Follow The Money To Florida: Young Rich Professionals Flock To The Sunshine State Posted on September 1, 2023 by Sarah Elles Boggs Florida is shedding its stereotype of being “Heaven’s waiting room,” as we have been historically described with a healthy dose of snark. A post-COVID mass exodus from cities such as New York, Chicago and Los Angeles has earned Florida the position of amassing the highest number of affluent young professionals over any state in the US, according to IRS earnings data. Smart Asset did a recent study with findings from IRS data from 2021 to see where young professionals, people aged 26-35 who earn $200,000 per year or more, are moving. By and large, they are flocking to Florida and more specifically, to Miami. This migration is evident along the streets of Brickell and Downtown Miami, where high paying jobs and entertainment options are plentiful. Coconut Grove is another hot neighborhood for the young and moneyed with our laid back yet upscale atmosphere. According to the study, Florida saw 3,391 high-earning young professionals and 1,216 high-earners left the state, resulting in 2,175 as the net migration. Texas was a close secod with 1,909 new high-earners in their tax roll. These young and affluent taxpayers represent the top 2% of earners in that age bracket, and they come with the added expectation that their salaries will continue to grow as they become more experienced in their career paths. Where These Earners Are Coming From According to CNBC, many of these high earners are coming from highly-taxed states like New York and California. While this is certainly the case, we have also seen a mass migration in the Miami area from Chicago after Ken Griffin’s Citadel announced the relocation of its headquarters to the Magic City last year. The young professionals are both chasing opportunities from companies like Citadel, where interns could earn up to $19,000 per month, and running from the problems of their home cities. The local governments in New York and California have become so tolerant and permissive of the problems many cities face, they have become havens for crime, drugs and homelessness. The young and productive would obviously rather live in a cleaner and safer city that is ripe with opportunity, and here we are. What This Means For Miami As this migration continues, the only realistic result is that demand for housing in the urban core of Miami and surrounding areas is not likely to let up anytime soon. Citadel hasn’t even begun construction on their new headquarters and ancillary firms are following suit increasingly as they get settled. The job market in Miami is incredibly rich on the professional level, so we will need every one of the new housing units in the construction pipeline to be developed. While the new housing units are going up, we will also need more schools. There is an incredible strain on Miami’s school system, particularly with the private schools. These are issues that we are working out as we go along, with outposts of some of New York’s most prestigious schools opening in the South Florida area. In a nutshell, Miami is on the map in a large way with the young professional crowd. We offer the lifestyle, professional enrichment and rich culture that make us a long-term winner for them to lay ground roots and thrive. If you would like to discuss moving to a new neighborhood or building in the Miami area, please contact Douglas Elliman Real Estate broker Michael Light at 786-566-1700 or via email at michael@miamiluxuryhomes.com.