Single-family houses may be hot, but luxury condos are selling better than you think
The pandemic might have driven some buyers out of towers and into single-family houses. But recent sales are proof that for many luxury buyers, condos are still the way to go in South Florida.
Consider: Downtown Miami’s One Thousand Museum closed on $75 million in deals in the past 90 days. In Sunny Isles, Armani/Casa signed two contracts for a total of $5.8 million since the COVID-19 outbreak began. In downtown Miami, Aston Martin Residences recently closed on four units totaling $8.75 million and Brickell Flatiron closed on $31.62 million in sales since March.
“We are still going to have condo buyers because it is a great lifestyle,” said Ron Shuffield, president and CEO of Berkshire Hathaway HomeServices EWM Realty. “These are like mini-country clubs with the amenities.”
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Still, the luxury-condo market was oversupplied even before this year. Once pandemic restrictions began, Realtors were forced to go virtual.
To attract buyers, they added incentives and dropped prices.
The sales team behind Armani/Casa is offering gift cards worth $25,000 for home buyers to purchase furniture from Armani/Casa, said Sebastian Tettamanti, senior vice president of sales and marketing for Dezer Development. Since May, the tower is also allowing potential buyers to rent for a year, paying $9,000 to $25,000 per month and buy a year later, with their monthly payments going toward the purchase.
Another incentive offered to potential luxury-condo buyers? Flooring. It’s one less thing for a buyer to worry about, said Miltiadis Kastanis, Douglas Elliman director of luxury sales.
But the ultimate draw is discounting. Aware of the slowdown in sales activity and the oversupply, potential buyers are looking to negotiate prices.
“They feel it’s a buyer’s market and they can dictate the pricing,” Tettamanti said.
Armani/Casa has not reduced prices but One Thousand Museum and others, have. “Prices are always a sensitive issue,” said One Thousand Museum co-developer Louis Birdman. “When the shutdown happened, if a buyer came in, you don’t want to lose them due to a few dollars.”
The incentives seem to be having an effect. Pending sales and closed sales in the luxury-condo market continue to inch higher. In Miami-Dade County, April brought 26 pending luxury-condo sales, while May brought 31 pending sales. Both are significantly down from the April and May 2019 numbers of 112 and 95.
Luxury single-family homes performed better, with 54 pending sales in April and 101 in May.
Buyers who are looking for the ease of a condo are looking for house-like scenarios, including size, outdoor spaces and low density.
“The size makes a difference if they can find a unit with more square footage and it may not be their primary residence,” said Birdman. Units at One Thousand Museum start at approximately 4,600 square feet.
Outdoor space has been a draw, too. Kastanis is finding that a private park at 87 Park Residences in Miami Beach and the site being adjacent to a public park are popular amenities.
Residents also want towers with limited units, combining low density with ample space for residents, Kastanis said.
Projects in the future are likely to have less floors and units, Shuffield said. “Boutique buildings are here to stay. In a changing market, developers may wait a year or two to start working on a new project. And even then, they’ll want a shorter marketing and selling time.”
This story was originally published June 8, 2020 at 7:00 AM.
