What’s Driving the Luxury Real Estate Market?

The south Florida luxury home market is booming. It began in my estimation about a year ago, in August, when I and a few other high end real estate brokers started seeing a real uptick in buying and selling activity in the upper segment of the real estate market.  Gulf Stream in particular may have been one of the hottest markets in South Florida. Surprisingly, that was during the late summer, traditionally a time when sales tended to slow.

That increased sales pace in luxury homes has continued through the New Year, and is being driven by three key economic factors that I have tracked over the years.

The first element is the trend of the stock market, which has recently been extraordinary, hitting new highs. This has provided wealthy investors with additional funds and the confidence to make major investments in new or second homes that satisfy their personal tastes for leisure activities like golf, tennis, beaches and boating. When consumer confidence is high buyers are willing to pull the trigger more often and in even some cases over-pay a bit to secure a property. This wouldn’t happen in previous years.

The next factor is the fact that almost 70% of investors and buyers of south Florida’s luxury real estate are from New York, particularly Manhattan and the Hamptons. According to the NY Corcoran Report, “Closed sales in the first quarter of 2014 increased 38 percent over the same period last year…sales volume rose by 27 percent…and [Hampton] properties that are unique and those that are priced well within their particular range are selling much more quickly than usual.”  Some luxury apartments in Manhattan are exceeding over $2,000 per square foot numbers not seen since the last boom.

That information bodes well for ongoing purchases of higher end properties in our areas as those sales create a “trickle down” effect on purchases in south Florida. You will see a parallel when the New York/Hampton real estate markets are doing well, Palm Beach will follow.

The final element that influences the market is the economics of supply and demand. For example, in the highly desirable areas of Gulf Stream, Manalapan and Ocean Ridge, currently there are about 50% of the numbers of homes listed today, compared to just a few years ago. These home range in prices from $750,000 to over $39-million for a newly constructed, furnished Intracoastal to ocean Manalapan residence situated on approximately 2-acres. When inventory is low it helps create a sense of urgency in the market with buyers.
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Real Estate testimonial from Steve & Judy Miller

Real Estate Testimonials – Steve & Judy Miller

We want to personally thank Steven for his assistance in selling our home. After having listed our home with another broker for over a year, he was referred to us by a trusted friend, and from the beginning we saw the difference he made in the marketing of our home.

Steven’s approach took a great deal of stress off our shoulders, and he not only performed well, but exceeded our expectations.  His professionalism, energy, attention to detail and follow-up made us certain that we were in the best hands possible.

Steven proved that we made the right choice, when after only 120-days you sold our home at the agreed upon price.  We can’t thank him enough for everything he has done, and are delighted to recommend him to our friends and anyone who is looking for the best in real estate sales of upscale properties.

– Real Estate testimonial from Steve & Judy Miller