In recent years, South Florida has seen an influx of Northeasterners, drawn by the state’s lack of income tax and low property taxes, particularly in the wake of 2018’s tax reform.
By December of last year, the sales of high-end homes and condos in Miami-Dade, Palm Beach and Broward counties had spiked significantly. And in the midst of the Covid-19 pandemic, demand has continued to rise as buyers flee crowded cities for more space, larger properties, and a stronger sense of safety.
At the same time, the fundamentals in Broward County remain especially strong. In the first quarter of 2020, the greater Fort Lauderdale area saw total home sales increase 3.4% year over year, and luxury single-family home transactions were up 26.7% for the same period. The median sales price increased 7% for houses and 6% for condos, according to the MIAMI Association of Realtors.
In Broward County, the communities of Miramar, Plantation, and Davie have the lowest inventory at the moment, suggesting strong real estate activity, while Zillow shows that the city of Fort Lauderdale has some of the highest-priced homes currently on the market in the county. And local real estate experts say they don’t expect the robust activity to let up anytime soon, making now a great time to invest in the Broward County luxury market.
“South Florida has always been a hot spot for Northeasterners, mostly second-home buyers who want to get out of the cold weather,” said Jared Ringel, an agent with Compass Florida who covers Palm Beach, Miami and Broward counties. “Now, especially, we are seeing a massive influx from the Northeast, from people looking to move here permanently.”
Why Buyers Are Considering Broward County
“Even before the coronavirus crisis, for reasons like tax and lifestyle, high-net-worth individuals from New York were already eyeing South Florida,” said Edgardo Defortuna, president and CEO of Fortune International Group.
And now, the coronavirus pandemic has not only dissuaded them from living full time in densely populated cities such as New York; it has also revealed that it’s not imperative to live close to one’s workplace.
“This is giving them the opportunity to make the jump, and now that the school year has ended, everyone is starting to make their moves,” Mr. Ringel said.
Broward County is especially well-positioned at this moment, given its lower density compared to other luxury markets in South Florida, and sales were already strong before the onset of the pandemic. In the first quarter of 2020, the dollar volume of single family homes in the county increased 19.3%, while the dollar volume for condos rose 9.9%, according to the MIAMI Association of Realtors and the Multiple Listing Service (MLS) system.
Developers are swooping in, particularly in Hallandale Beach, hoping to make the town located between Fort Lauderdale and Miami a new hub for buyers from the northeast.
“People have looked at Sunny Isles and seen that it’s all high rises and high-density, while Fort Lauderdale, Broward County and Hallandale Beach have a cool vibe, low-rise buildings, and beaches,” said Shahab Karmely, the developer of 2000 Ocean, a 64-unit waterfront development in Hallandale Beach, scheduled to be completed mid-2021. “People are waking up to its value, coming to us and saying they love that the area is low-key and doesn’t have height.”
Along with less-populated beaches than what you’d find in Miami-Dade County, Broward County is positioned between two major airports, offering easy accessibility for Northeasterners. Many buyers have already swooped in, and properties right on the water are increasingly hard to come by.
“From Fort Lauderdale all the way to Palm Beach, a good amount of the inventory of waterfront homes has been absorbed very quickly, at prices we haven’t seen in a while,” Mr. Defortuna said.
In Miami-Dade and Broward counties, home sales in the luxury sector—defined as $1 million and above—saw double-digit increases earlier this year, compared to March 2019, and the median price of single-family homes in the county rose by 6.8% in March year over year, according to the MIAMI Association of Realtors.
“When people come down here to visit, they look at real estate and end up falling in love with the lifestyle,” Mr. Defortuna said. “South Florida is very well-positioned for that, and so the impact of the pandemic hasn’t been felt as strongly here.”
The Potential For Returns On Investment In Broward County
While South Florida, and particularly the Miami-Fort Lauderdale-Palm Beach area, has been a top destination for wealthy New Yorkers, because of the coronavirus, more Northeasterners could be making permanent moves south.
“The South Florida market is going to be great. Anyone who gets in now, it’s a great time to buy, and for investment purposes you can’t lose if you buy in the right neighborhood,” Mr. Ringel said.
Real estate experts anticipate a busy summer season, with more wealthy domestic visitors vacationing in South Florida rather than in Europe, due to the pandemic.
“In the short-term, more Americans may be buying primary residences or vacation homes in the region,” Mr. Defortuna said, “while for the long-term, more foreign investors—particularly from Latin America—may head to South Florida as the world begins reopening. The biggest question is when things are going to open up, and when they do, there will be a lot of inquiries. But it has taken a while for many countries to catch up to the curve of the pandemic and many are still in the upside.”
Given that uncertainty, it is difficult to predict what pricing will do in South Florida’s luxury real estate markets. But for now, the prospects for making strong returns on investment are promising.
“In Key Biscayne next to Miami, houses that were renting for $15,000 to $20,000 are now renting for $60,000 to $70,000, and the same thing is happening all the way up the coast to Palm Beach,” Mr. Defortuna said. “Houses that didn’t move before are now trading during this pandemic.”
Mr. Karmely predicted that this surge in demand will continue, even after the coronavirus crisis abates.
“Inevitably, you will see continued growth in South Florida in all tiers of the market,” Mr. Karmely said. “There are people who can be anywhere and choose to be here. They see they’re getting great value.”
Source: Mansion Global