The South Florida luxury housing market suffered headwinds in the second quarter. The number of sales dropped up to 55.6% year-over-year in one neighborhood.
Transactions fell for condos and single-family homes priced above $1 million in Coral Gables, Fort Lauderdale and Miami Beach, according to the second-quarter Douglas Elliman sales reports. The ripple effects from the pandemic caused the downward trend in sales, including stay-at-home orders and the lack of access for tours, said Jonathan Miller, president and CEO of Miller Samuel real estate consultancy firm and the author of the reports.
"This is what the housing market looks like in a pandemic," Miller said. "The uncertainty still remains because we are now seeing a second wave in Florida."
The number of sales dwindled when comparing the second quarter of 2019 to the second quarter of 2020 as follows:
— Coral Gables
Condo sales dropped by 55.6%, from a total of nine in 2019 to four in 2020.
Single-family home sales fell by 23.1%, from a total of 13 in 2019 to 10 in 2020.
— Fort Lauderdale
Condo sales decreased by 39.3%, from a total of 61 in 2019 to 37 in 2020.
Single-family home sales shrank by 40.7%, from a total of 59 in 2019 to 35 in 2020.
— Miami Beach
Condo sales declined by 50.6%, from a total of 87 in 2019 to 43 in 2020.
Single-family home sales dwindled by 18.2%, from a total of 11 in 2019 to nine in 2020.
The drop in transactions in South Florida's luxury market mirrored the activity in the median-priced market in Miami-Dade and Broward.
But sales activity has increased in the third quarter, said Jay Phillip Parker, CEO of Douglas Elliman Florida brokerage.
"The virus took the momentum that we were experiencing with the tax reform and increased it. Many people in the Northeast feel like they are living in a different city and are ready to move," he said.
Luxury buyers are coming from Boston, Chicago, Connecticut, Long Island and New York, Parker said. Most looked for single-family homes across different neighborhoods in Miami-Dade and Broward.
"The initial surge was with single-family homes because it provided a level of privacy that you couldn't get from a condo, including a private backyard and not having to ride a packed elevator," Parker said. "Condos got smart. They realized they could put in protocols that gave residents a private environment. Residents could park their own cars, and there were caps of one person riding an elevator at a time."
The pandemic may negatively impact the sales activity in the luxury market again, Miller said.
"All bets are off until we have a vaccine. The market is waking up after a three-month slumber with sales increasing month-to-month," he said. "This is all good, but it comes down to how well the state manages the pandemic to sustain the momentum."
Another stay-at-home order could pause the progress made in the third quarter thus far, Miller said.
"The buying and selling of homes is an in-person transaction," he said. "We need to see virtual showings as a supplement instead of a replacement of in-person tours. They're not equal."
