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Exploring Pricing & Inventory Trends For Coral Gables Waterfront & Non-waterfront Homes

The luxury market in Miami is shifting currently, and I’d like to explore with you what I see happening in a market I know well, Coral Gables. Coral Gables is a relatively stable market due to the high average income of homeowners, strong municipal services and lack of new speculative construction since the market is substantially built-out. However, Coral Gables is not immune from the general real estate cycles and we are seeing some interesting factors shaping the market now and into the next year. I’ve broken out the market into luxury waterfront and non-waterfront homes, and have analyzed historical data past the last cycle to give a good context for the two charts I have prepared. I hope you find this analysis to be insightful.

Source: Trendgraphix.com

Several factors currently in play are contributing to the shifting market – from a seller’s market to a buyer’s market. From an inventory and pricing level there are similarities between our current market and the peak of the last cycle in mid-2006. At a pricing level, we are at a peak currently of $457/Square Foot for sold properties, which is the highest since $454/Square Foot in 2006. We are also at a peak level of inventory in recent history with 542 houses for sale. The last peak level of inventory occurred in early 2007 with 531 houses listed for sale. In the last cycle, as pricing and inventory levels peaked, we witnessed a sharp decline in the number of sales, which led to falling prices and many sellers removing their properties from the market so as not to sell in a declining market. We have started to see a lower number of sales occurring in 2016, with about half the volume of sales compared to what we had in 2015 (at price points of $1.5 M or higher). This lower volume of sales compounded by the sharply rising inventory and high prices will apply downward pricing pressure to the market as we move further into 2016-2017. I don’t anticipate the same level of price declines as per the last down cycle, but the shift in the market is certainly here and sellers should be aware of the dynamics in play to properly price and sell their properties if they do choose to do so in the current market.

Source: Trendgraphix.com

The Coral Gables waterfront market is a tale of two markets right now: a healthy and active market for homes on the Coral Gables Waterways, but a less vibrant market for waterfront properties east of Old Cutler Road in gated communities – a difference of a roughly 1-year level of supply versus 2.5-years, respectively. As we see, prices have risen sharply in the seller’s market of the last few years to a peak of $776/Square Foot for the average waterfront house sale this year. However, in the last 1.5 years we’ve seen a gradually increasing level of inventory, especially in the gated neighborhoods. We are nowhere near the peak inventory levels of the last cycle (214 properties listed for sale currently versus 398 for sale in 2009), but as supply continues to increase in the coming quarters, we will likely see the pricing trend start to soften as sellers need to be more competitive to sell their houses. I expect this to be a gradual market shift and not the steep decline of 2008-2009. There are still high-water mark price points being achieved for special properties, but the volume of sales is ramping down slowly and should continue to do so as we move forward.

My business has been built on cultivating long-term relationships. Please let me know if I can be of assistance to you and your family, whether renting, buying or selling.

You can reach me directly at 305-793-4783 or Ben@BenMossGroup.com.

Ben specializes in South Florida luxury real estate in the cities and neighborhoods of Coral Gables, South Miami, Pinecrest, Coconut Grove, Miami Beach, South Beach, and Key Biscayne. His track record of success includes significant sales and record breaking transactions in Miami-Dade and Broward County. As a thought leader in South Florida luxury real estate, Ben is regularly featured in local media sharing insights from his comprehensive real estate market reports. Ben also runs the Sports & Entertainment division for ONE Sotheby’s International Realty, having represented hundreds of athletes and entertainers with their real estate needs nationwide. Experience the power of passion aligning with data centered knowledge - reach out to Ben about your upcoming real estate transaction.