Real Estate News

The nation’s most unequal housing market is Miami Beach

A rendering of the penthouse at Faena House in Miami Beach that sold to a Chicago hedge-fund billionaire for $60 million, a South Florida record, in September.
A rendering of the penthouse at Faena House in Miami Beach that sold to a Chicago hedge-fund billionaire for $60 million, a South Florida record, in September.

When it comes to homes in Miami Beach, the “haves” have it all.

The city’s housing market is the most unequal in the U.S., according to a report from national real estate brokerage Redfin. The report covers the third quarter of 2015 and compares the luxury market — which Redfin counts as the top 5 percent of homes — to the bottom 95 percent.

During the third quarter, the report found that luxury homes in Miami Beach sold for an average of $6.3 million, about 12 times as much as the average price ($522,000) of a typical home.

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The disparity in other big cities was smaller: Luxury homes sell for between five and six times the price of typical homes in Atlanta, Houston, Los Angeles, Boston, Chicago and Washington, D.C.

(One caveat: Redfin said it was unable to collect data on New York City because of the way its Multiple Listing Service, a tool used by Realtors to list and sell homes, is set up.)

Nearly half of the 20 most unequal housing markets in the country are in South Florida, Redfin found.

That’s partly because the region has so many out-of-towners coming in to scoop up homes.

A penthouse condo in Mid-Beach recently set the record for residential real estate in Miami when it sold to a Chicago hedge-fund billionaire for $60 million in September.

$6.3 millionAverage sales price of a luxury home in Miami Beach in 2015

“Buyers in the multi-million dollar luxury market are foreign or coming from out of state,” Aaron Drucker, Redfin’s South Florida managing broker, said in a statement, “while the folks who live and work here full time make up the rest of the real estate market.”

The median household income in Miami Beach was about $42,500 in 2014, according to U.S. Census data.

But there are signs the gap has reached its widest point: Redfin also found that prices for luxury homes in Miami Beach have stopped rising. They stood at $6.3 million in the third quarter of 2014, the same as today, after years of rapid growth.

That’s largely because swooning economies in Latin America, Europe and Asia have hurt the ability of foreign buyers to afford local real estate.

Nicholas Nehamas: 305-376-3745, @NickNehamas

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