Mention the words “Russians,” “Miami,” and “real estate” in the same sentence, and chances are you envision ultra-luxurious, multimillion-dollar beachfront properties owned by powerful oligarchs with money to burn. And while this cartoonish image may have been accurate in small doses five or six years ago, global events and market trends have dramatically changed the profile of the typical Russian homebuyer in Miami.
As a native of Moscow and a veteran of Miami real estate, I have worked with many Russian customers over the past 15 years, making me both a witness to and participant in this fascinating change. Through this experience, I offer you a more realistic perspective into the growth and evolution of Miami’s modern Russian homebuyers.
Cold War Ends/Hot Market Starts
One note to consider from the outset: Specific data to verify Russian migration to and from Miami are very difficult to track or confirm, so much of this column is based on anecdotal evidence, personal observations and my own participation in the local Russian community.
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Three factors coincided to fuel Russian interest in Miami real estate in the late 2000s: the extraordinary growth of Russian wealth, the desire among these Russians for a stable economy and political system, and the bursting of Miami’s real-estate “bubble,” resulting in thousands of brand-new condo units at bargain-basement prices. While many of these Russians may have visited the city on vacation over the years, the opportunity to own homes here became too good to pass up at this time.
There have always been small Russian communities in Miami (most notably among the Jewish population), but the numbers truly began to swell with the fall of communism in the 1990s.
Sunny Isles Beach quickly became (and still remains) Miami’s “Little Moscow,” with thousands of Russian emigrés and investors snapping up the suddenly-affordable beachfront properties, and also opening restaurants and shops nearby. It was during this time that some of the big-ticket Miami real-estate purchases by Russian millionaires (and billionaires!) made serious headlines, including the most expensive home ever sold in Miami (at the time), a 30,000-square-foot residence on Indian Creek Island that went for $47 million to an anonymous Russian buyer. Russians spent more than $12 billion on overseas real estate in 2011, with more than $1 billion of that coming to the United States, according to the National Association of Realtors. I had the good fortune to be involved with a few of those heady deals at the time.
From Russia With Cash
But these blockbusters overshadowed the many middle-class and white-collar Russian families who also moved here during those years, and who now typify the modern Miami Russian homebuyer.
These more modest transplants have become the norm, sparked by three factors: the collapse of the Russian ruble, the events in the Ukraine and the Crimean peninsula over the course of 2013 and 2014 (which resulted in U.S. sanctions that made buying extremely difficult for Russians), and the Treasury Department’s sharp increase in scrutiny over Miami real-estate cash deals valued above $1 million. This “imperfect storm” sent the super-wealthy Russians looking elsewhere, but these more middle-class buyers want the same safety and security that only America can offer.
This new wave of buyers is branching out beyond Sunny Isles into neighborhoods such as Coconut Grove, Key Biscayne, Coral Gables and the downtown Miami/Brickell area. Like many other cultures, Russians value education and the arts, and these new buyers — which tend to be younger and more family-oriented — are drawn to areas close to Miami’s improving schools and outstanding dance, theater and visual-arts offerings. Over the past six months, I have closed several downtown Miami sales with Russian buyers and am seeing more interest in that area with each passing day.
The Trump Effect
Of course, no mention of Russia or Russians can exclude the impact of the 2016 presidential election and the transition to the Trump administration. We can save any discussion of potential hacking rumors for the political blogs and cable networks, but most everyday Russian-Americans are just glad to see the turmoil of the elections subsiding. They are optimistic that the next few years will mark an improvement in Russian and American relations, making it easier to get visas and do business here and abroad.
The new wave of Russian buyers is branching out beyond Sunny Isles into neighborhoods such as Coconut Grove, Key Biscayne, Coral Gables, and the downtown Miami/Brickell area.
For example, two Russian families with whom I work purchased homes here in the late 2000s but then had trouble securing visas once the U.S.-imposed sanctions went into effect. (I should mention that these are “normal,” hard-working families who had nothing to do with the events in the Ukraine but suffered nonetheless.) They were forced to sell these Miami properties a couple of years ago and now are hopeful that they can return here in the new political climate. In fact, one family is quite interested in purchasing the exact same residence they owned previously.
Given the unpredictability of global events in recent years, it remains to be seen whether their optimism is well-founded. Locally, however, steady trends would seem to indicate a growing Russian-Miami population that is becoming more mainstream, planting roots in new neighborhoods and increasingly becoming a more visible part of Miami’s unique cultural tapestry.
Master Broker Inga Boutboul is a top-selling producer with ONE Sotheby's International Realty. She can be reached at email@example.com or 305-450-7048.
▪ This was written for Business Monday in the Miami Herald and reflects the view of the writer, not necessarily of the newspaper.
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