A split emerged in Miami’s luxury real estate market during the first three months of 2015: Resales of single-family homes chugged along at a steady clip, but the market for existing luxury condos peaked as sales slowed and units stayed up for sale longer.
The number of luxury single-family homes sold grew 2.3 percent in the first quarter of 2015 compared to the same quarter last year. But luxury condo resales were down 3.6 percent over the same period.
Those numbers come from a report released Wednesday by the Miami Association of Realtors. “Luxury” sales are those that break the $1 million mark.
Existing condo sales are slipping in part because of the number of new towers going up. The new amenity-laden units are siphoning luxury buyers away from the resale market.
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But prices for resales also may have surged too high.
The median sales price for a luxury condo resale was $1.7 million in the first quarter of 2015, up from $1.5 million in the first quarter of 2014. That’s a 13.3 percent spike.
“I think that in general, when pricing goes up like this, the pace of sales is going to be slower,” said Andres Asion, a broker at Fortune International Group.
Asion said that the economic downturn in Latin America and a strong dollar are also contributing to the slowdown.
As a result, owners are having a harder time selling their units. Luxury condos stayed on the market for 103 days during the year’s first quarter, a 15.7 percent increase from the first three months of 2014.
Abundant inventory is a concern, too. The number of luxury condos on the market rose, growing 8.1 percent year-over-year.
A jump in supply coupled with a drop in sales suggests that sellers may have to lower their asking prices, said Ron Shuffield, president and CEO of EWM Realty International.
In the single-family market — where inventory is generally tighter and there is less new construction — sales held steady during the first quarter.
Luxury properties stayed on the market for 94 days in the first quarter of 2015, unchanged from the year before. Median sales prices grew to $1.7 million, up from $1.6 million.
But supply also is growing for $1 million homes, as sellers sense a favorable market. The number of new listings went up 22.4 percent.
The number of new homes for sale is slowing price growth, Shuffield said.
“We definitely are feeling a sense of prices having kind of reached near their peak,” Shuffield said. “The buyers are saying, wow, I don’t know if I want to pay that because I have more options to choose from.”
Shuffield said that recent statistics collected by his firm show that luxury single-family sales dropped slightly in the late spring. The Miami realtor’s association report covering those months won’t be released until next quarter.
“What this is telling us is that the pricing needs to be refined,” Shuffield said. “We still have a ton of buyers in the marketplace, but they’re more savvy.”