What's Happening in Miami?
By Alex Shay

What’s happening in Miami? It’s a question I get asked over and over again. Sellers want to know; and buyers want to know. We’re talking real estate, Miami Beach luxury real estate, to be exact. I am going to analyze the first quarter for you, in order to give you a feel of the real estate climate and marketplace in Miami Beach during the first 3 months of 2006.

Do you want to know what’s happening? I’ll tell you in a word, resistance. It’s a word that realtors don’t like to hear, but that’s what has been happening. Sellers are keeping their asking prices up, and buyers are resisting. Sellers feel that the number of luxury homes in Miami Beach is very limited, and that the demand is high, and buyers are refusing to pay the prices being asked. We are experiencing a bit of a standstill in the Miami real estate marketplace, and the result is that there far more luxury waterfront properties on the market now, than there were during the first quarter of just one year ago. For example, let’s talk about Miami Beach real estate, and let’s include Indian Creek Village, and Bal Harbour. Last year, during the first quarter, there were 29 closings of listed luxury waterfront properties, as compared to 24 closings during the first 3 months of 2006. However, last year during the same time period, there were less than 90 listed luxury waterfront homes as compared to almost 200 luxury homes that are presently listed on the market for sale. That in itself should tell you that the Miami real estate marketplace has changed, at least temporarily.

People ask me what I think will happen in the future, but I don’t have a crystal ball. I do have my opinions, however, as well as a great deal of experience in the luxury real estate market, and although I can’t pretend to be able to predict the future, I can say that the demand for luxury waterfront real estate on Miami Beach remains high. Miami is an international city, and the only place in the USA, where the weather remains warm all year round. That makes Miami a very desirable place to live and to own real estate, especially luxury real estate. People come to Miami from all parts of the globe, and some of those people see the investment opportunities that this wonderful city offers. They buy property. For that reason, the demand for real estate is high, and will probably remain high in the foreseeable future.

Owning Miami real estate is most likely going to mean that you will be “sitting pretty” at the end of the day. Prices have not gone down in many years, and because the amount of international travel has increased dramatically over the past 20 years, people will continue to purchase Miami Beach real estate. What does it all mean? In my opinion, it means that although we may be at a temporary standstill, in so far as buyers resisting the high asking prices of sellers, things are still looking good. Closings of luxury properties are still happening, and will continue to happen. If a buyer is astute, and allows him or herself, to become well educated in the real estate marketplace, that buyer can make a good deal, and within a few years time, may thank his/her lucky stars for having the courage and willingness to take a chance.

A few years ago, buyers would sometimes complain about the high prices; that’s when you could pick up a luxury waterfront property, for $500,000. Today that same property may be valued at more than 5 times what it was worth then. Therefore, if you can buy a luxury property on Miami Beach, and get a fair deal, do it. Don’t hesitate. You wont be sorry. I have yet to find anyone who said that they were sorry for purchasing Miami Beach property. This is not a city located somewhere in the USA where people merely buy and sell property, because they are able to afford more, or because they are downsizing. It’s not a place where only people who live here buy property. It’s a place where people from all over the world buy and sell, so, it is my feeling that unless some unknown disaster strikes, almost anyone buying Miami Beach property, is going to be very glad they did.

One last thing that should be mentioned is that those who are interested in luxury real estate are not hesitating to purchase a home because of negative economic conditions; it appears as if the economy is fine at the moment. They are hesitating because they don’t know what to do. No one wants to make a bad deal, and no one knows what the future will bring. They approach realtors in whose opinion they have some faith, and ask the age-old question; will prices go up or down? In the near future, they won’t go up much, or down much. What can be said is that prices of luxury waterfront property on Miami Beach, have stabilized.

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