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Corey Shader Explains Why Luxury Real Estate Markets Are Hotter than Ever in South Florida

The real estate market across the country has been red hot over the last two years, fueled by a massive demand from people moving out of cities during the pandemic, record-low mortgage rates and relatively low inventory.

But, as mortgage rates are on the rise and home prices skyrocket, some areas of the country are experiencing a dip in the local real estate market. As entrepreneur Corey Shader explains, though, that is not happening in South Florida’s luxury real estate market at all.

In fact, quite the opposite is happening. The market is still on fire, thanks to record low inventory.

According to data from appraisal and consulting firm Miller Samuel, inventory in South Florida was at 7,906 units in the first quarter of 2022 — a record low. Between 2017 and 2019, the average number of units on the market for the first quarter of the year was 27,000 — more than three times what it was earlier this year.

With inventory so low, sales are making records, too. People who want luxury homes in South Florida have to act and do so fast.

According to Miller Samuel data, there are five luxury markets in South Florida, and they contributed 45% of all the real estate sales volume in the first quarter of the year. Those sales totaled $5.4 billion of the $11.8 billion in total real estate sales for South Florida.

As Corey Shader says, these top five luxury markets in South Florida are Palm Beach, Miami Beach and the Barrier Islands, Coral Gables, Fort Lauderdale and Boca Raton/Highland Beach.

Average prices in Palm Beach, according to a report from real estate firm Douglas Elliman, were more than $21 million. While the average price per square foot dropped 2.7% from Q4 in 2021 to $3,659 in Q1 2022, the total number of sales (15) increased by 67%.

The luxury real estate market — which is defined in most cases as being in the top 10% of all sales prices in a particular market — is often less directly affected by economic events such as rising mortgage prices. However, as Corey Shader explains, when mortgage rates rise, often other economic forces are at play that could affect the market.

Mortgage rates are on the rise now, for instance, because the Federal Reserve increased the benchmark interest rate to try to curb inflation. Investment markets are out of whack as a result, too, and that could affect the bottom line of buyers in the luxury real estate market.

Even if the market does end up cooling off in coming months, those properties that are most likely to continue to sell well are those on the water.

As the first quarter of this year has shown, it seems as though South Florida’s real estate market is insulated from the bigger economic forces at play.

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Name: Jessica Brown
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Organization: Mercury News Media
Website: https://www.mercurynewsmedia.com

Release ID: 89076460

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