Miami Beach Waterfront Homes Blog

I believe that the housing market is at the beginning of a healthy balancing process, in other words, the capitalist system of supply and demand is in the process of adjusting to economic reality. This week, I took the opportunity to check in with clients that live in the greater Miami area and happen to be high earning (by most upper middle class standards) professionals i.e. doctors, attorneys, accountants, business owners, and high ranking Fortune 500 executives. The commonality is that all say that their living expenses have gone up disproportionately in comparison to their incomes (taxes, windstorm insurance, maintenance fees, homeowners insurance, etc.). The affordability of Greater Miami real estate must be closer in line to the income of area residents.

Buyers that are willing to purchase (and they ARE out there), are only willing to move forward *at the right price*, which today is fluctuating between closed sales prices of 2002 – 2004 which generally depending on the costs associated with ownership. For example, Aqua at Allison Island, which is a beautiful waterfront community located on Miami Beach, has experienced rather severe price declines over the past few months. I attribute this mainly to high maintenance fees of $.98/ S.F. (limited # units, large property), which brings the sales price adjustment closer to the 2002/2003 price range. Coincidentally, most luxury condominium buildings and many homes have similar maintenance fee structures (due to high insurance costs, operating expenses, necessary amenities demanded by residents, etc.) I believe that this will have the greatest price impact on downtown Miami properties such as Marquis, The Met 1 – 3, 900 Biscayne, Blue, 1800 Club, Paramount Bay, Midtown Miami, The Ivy located on the Miami River, and many others.

The good news is that premier location waterfront properties such as The Murano at Portofino, Continuum on South Beach, Canyon Ranch Miami Beach, Murano Grande, Setai, Icon South Beach, and Il Villaggio located in South Beach on the Ocean or Bayfront are maintaining their overall values (generally 2005 closed sales prices). Condo pending sales prices for these properties are ranging (for premier units) between $750/S.F. and $1,350/S.F. These are the properties with the highest proportion of foreign/transplant buyers from such destinations as New York, Boston, Washington DC, Europe and South America.

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