The Capital Of Capital: Miami’s Luxury Real Estate Market Experiences Double-Digit Gains

 
While the majority of the world’s luxury real estate markets are experiencing their first losses since the 2008 financial crisis, Miami surges ahead. According to a recent study undertaken by Knight Frank and published in Mansion Global, Miami is the only city in the United States to experience any gains at all, with local luxury real estate prices rising 11% from the first quarter of 2022. The only city in the world with larger luxury real estate price increases than Miami was Dubai.

“The slowdown in growth has overwhelmingly been driven by sharply higher interest rates following a recent tightening in global monetary policy,” said Liam Bailey, Knight Frank’s global head of research, in the report.

Due to low interest rates, the obvious favorable climate, and the attractive tax climate, the Miami luxury real estate market was already on the upswing when COVID hit in 2020. During this time, as we were all in lockdown, many realized that not only is Miami financially a great choice, the lifestyle is far richer than depicted in the media. While the vibrant nightlife and tourism communities are certainly there, Miami is also a lovely place to raise a family and conduct business.

Rendering of Rivage Bal Harbour Porte Cochere

Remote workers began to choose Miami. Celebrities such as Tom Brady and Gisele Bündchen moved their family to Miami Beach, as did Jared and Ivanka Kushner. Around this time, Mayor Suarez was deep in the throes of his mission to make Miami an international epicenter of not only lifestyle, but business as well.

His mission has been successful, the Magic City is now a hotspot for tech companies as well as the venture capital elite. Starwood Capital and Citadel are moving their headquarters to Miami and contributing to the thriving luxury real estate market as executives snap up homesteads for their families. Record-setting deals have been inked at a regular pace since the pandemic began to clear.

We are now a true “Capital of Capital.”

Is there a downside?

Of course, as with any astronomical growth, there are growing pains. Inventory shortages have plagued us for a few years now, causing prices to increase further and pricing locals out of their own market. Supply chain issues cause delays in the delivery of new luxury residential towers. Even the private school systems are creaking under the pressure of the influx of new full-time residents.

Fiancial Times has reported that so many families are relocating from Manhattan, our private schools are even more competitive than ever. Legacy families are being left behind as wealthy New Yorkers bring their private school bloodsport games down to Florida. For many families, there is no way to compete. One private school in Palm Beach received an $18 million gift from a newcomer. Naturally, his children were admitted. There is even talk from some of New York’s more prestigious private schools to open satellite campuses in Miami to accommodate these expat Manhattanites, but this takes time. For now, we will have to battle it out for the slots available in Ransom Everglades, Belen Jesuit, Miami Country Day and others of the sort.

The Shore Club Residences Terrace View

Looking Forward…

As we adjust to the new neighbors and the new levels of density, there are so many beautiful towers to look forward to. The Perigon Miami Beach is active in their sales process and it is going very well. The Shore Club Residences in Miami Beach is also performing well. On the mainland, Villa Miami and Edition Residences Miami Edgewater are quite busy, with sales swiftly being completed.

Overall, things look bright. There is no end in sight for the Miami luxury real estate boom of 2023 as long as Mayor Suarez continues to deliver a favorable business climate to match our lovely weather, culture and tax scenario. After the growing pains work themselves out and these new towers are delivered, we really will be sitting pretty and those who thought to buy in during the growing pains will have fatter pockets to show for it.

To speak more specifically about an investment or if you need/wish to move, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com. We would be honored to assist you.

Knight Frank Prime Global Cities Index Q1 2023 via Mansion Global