Miami Beach real estate sales have been sluggish for almost 3 years, and the trend continues today. Some sellers are still asking buyers to pay $1,000 or more per square foot of interior living space, in areas where waterfront homes are selling for more like $700 per square foot. The inflated prices have slowed the luxury Miami Beach real estate market to a standstill, with few closings taking place, and an over-abundance of luxury waterfront homes for sale.
As of today, there are 43 waterfront homes for sale on the Venetian Islands, as compared to 40 properties that were on the market in February 2009. The four Sunset Islands have 18 waterfront homes for sale, as compared to 14 houses for sale 4 months ago. In February, there were 31 homes for sale on Palm Island and Hibiscus Island, and today there 30. On North Bay Road, there are 19 bayfront properties listed for sale, compared to 16 that were available in February.
Numbers don’t always tell the entire story, but those people who were involved in the Miami Beach real estate market in 2004, may remember that there were relatively few homes for sale in those days, and when homes were listed, buyers were often outbidding each other, and homes were selling for the asking price, and often, for more than the asking price. When a property was listed, it didn’t take very long to sell. It’s a far different story in June 2009, so one would think that sellers now “get it”. They don’t.
Asking prices are still inflated. Part of the fault lies with realtors, who are willing to accept listings at almost any price, in order to prevent other realtors from taking the listing. When a seller tells an agent that he/she wants to sell the property for 50% more than the realtor knows they could possibly hope to get, the agent goes along with the seller, and secures the listing at the inflated price, hoping that the seller will lower the price in coming months. The results of this practice are evidenced in the stragnant luxury real estate market we are presently experiencing.
For buyers who have the money, it’s a great time to buy property, because a buyer can easily have his/her way with a seller, often purchasing a luxury home for hundreds of thousands, or even millions of dollars less than they would have had to pay just a few years ago. REO’s, which are bank owned properties, can be bought at bargain basement prices as well. In past years, very few luxury homes on Miami Beach were foreclosed, but not so anymore. Homes that were purchased for millions of dollars a few years ago, and subsequently foreclosed, can now be bought from banks at huge discounts. Oftentimes the same bank that owns the property will also take back a mortgage from the buyer. _Alex Shay