Sunday, July 14, 2019

Keyes Luxury Report: South Florida Sales and Prices Decline; Palm Beach County High-End Transactions Rise in Q2 2019



Mike Pappas

MIAMI, FL and PALM BEACH, FL – South Florida’s luxury condominium sector is feeling the impact of oversupply, while more realistic pricing is resulting in an uptick of high-end single-family sales in Palm Beach County, according to The Keyes Company’s quarterly South Florida Luxury Market Report.

All-cash condo and single-family transactions continued to decline in the second quarter thanks to more accommodating lenders and low interest rates.

Miami-Dade, Broward, Palm Beach and Martin counties had a year-over-year drop of 21% in luxury condo sales, from 590 in the second quarter of 2018 to 466 in the second quarter of 2019.

Cash transactions declined by 20.5% year-over-year to 337. The average sale price slipped by 9.1%, from $2.22 million to $2.02 million.

Single-family sales in the four counties had a significantly less severe decline, with a 2.6% year-over-year decrease in total sales to 951 and a 2% drop in cash sales to 541.

The average sale price fell by 8.4% year-over-year, from $2.62 million to just under $2.4 million.

Palm Beach County’s high-end single-family market was a bright spot for transaction activity. The county had a 7% year-over-year uptick in single-family sales to 429 and a 15.8% jump in cash sales to 301. This was fueled by a 13.8% decline in average sale price, from $3.03 million to $2.61 million.

“While South Florida’s luxury market consistently outperforms the national market, it is not entirely immune from the decline in high-end sales occurring nationally,” said Keyes President and CEO Mike Pappas.

 “During the second quarter, we saw the short-term impact of oversupply issues. But we still expect to see sales pick up throughout the region in the second half of 2019, as sellers adjust to today’s pricing.”

Pappas notes that looming interest rate cuts should ensure a strong second half of the year for South Florida’s luxury market – especially when combined with heightened demand from residents of tax-heavy states.

“These domestic luxury buyers are going to be opportunistic and capitalize on the lower interest rates to secure a win-win scenario of reduced rates and substantially lower taxes,” said he said.

“When the interest rate rose to 5% in October 2018, it essentially shut down the market. 

"There has been a one-point drop since then and the promise from the Federal Reserve to drop rates further.”

Keyes is the largest independently owned real estate firm in Florida and a Top 30-ranked firm in the entire United States, and is extremely active in luxury residential real estate. In 2018, Keyes generated $6.7 billion in real estate services across its Family of Companies.
  
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