In the wake of the global COVID-19 pandemic, and the associated need for social distancing, some have questioned the appeal of condominium living. And while it’s true that Miami condominium sales have slowed in recent months, there is plenty of good news for this dynamic sector. Here are some of the reasons I believe that the appeal of condominium living, particularly in Miami, is an eternal proposition.
Before outlining these reasons, let’s look over recent data from Miami Realtors that demonstrates the pandemic’s impact on our real estate market, as well as hope for a continued recovery.
A surface glance reveals that Miami-Dade County closed condominiums and townhouses sales from January through July 2020 totaled 6,358, down 1,866 units from the same time period in 2019. While 2020’s first quarter condo sales outpaced 2019 (with 3,171 closed sales compared to 2,997, respectively), April 2020 closed sales dropped to 711, as the outbreak took root on our shores. In May, that figure slipped to 563, down 148 from the previous month and 905 short of the same month in 2019, despite major closings at high-profile Miami projects.
Over the next two months, Miami condo sales saw a positive uptick, with 804 closed in June and 1,109 in July. In my opinion, we can attribute this improvement to a number of factors: extraordinary and continuously growing demand from the northeast U.S., California and other heavily tax-burdened states, Miami’s robust hospital infrastructure and the resilience of its medical professionals, and our industry’s ability to adapt to the new reality.
What is clear is that there was great demand for Miami condominiums prior to the pandemic, and we have every reason to expect that demand to return when it eventually ends, for the reasons that follow.
THE APPEAL OF CONDO LIVING
Proximity and connectivity are among the main motivating factors for those who choose to live in a condo, especially in downtown Miami. The opportunity to reside within walking distance of retail, dining, culture, and a vibrant social scene will always hold enormous appeal, regardless of circumstances. And thanks to ride sharing services, improved outdoor and public paths, electric scooters and public transit options like the Metromover, Brickell Trolley and Brightline, Miami’s condo residents are able to live “car free” for the first time in history. Why drive hours to the places you want to go when you can walk out your door and be there in minutes?
Feature-rich amenities, including multiple pool decks, gyms, conference rooms, kids rooms, pet grooming, and saunas continue to evolve and adapt, as developers of new condominiums account for a post-pandemic era. You can also expect to see contactless entry/delivery systems, floor plans that account for work-from-home feasibility, and “Zoom Rooms” included in modernized floor plans.
Condominium living also offers convenience for residents who are done with the responsibilities of home maintenance, from repairs to landscape upkeep and everything in between. (These issues are handled by most new buildings’ respective homeowners associations.) Security is another aspect of condominium living with large appeal, offering controlled access to the premises, keycard entry, surveillance, and improved mail services. You get more for your money at a lower monthly cost than living in a house.
And there are beautiful waterfront views which are wholly unique to the Magic City. Whether we’re talking about Biscayne Bay, the Intracoastal Waterway, or the Atlantic Ocean, Miami condominiums offer some of the most spectacular views that nature can provide, while the glistening towers along Brickell Avenue and the downtown skyline offer classic city views that stand tall alongside any other major metropolitan destination.
Historically speaking, Miami condominiums have proven to be a real estate asset with tremendous potential for appreciation. Since 1993, South Florida condominiums have appreciated more than 229%, according to ISG World’s 2018 Miami Report. And yet, despite this massive appreciation, Miami prime waterfront real estate remains significantly more affordable than other leading global cities.
For example, $1 million in U.S. dollars will buy you approximately 1,001 square feet of prime waterfront real estate in Miami. In comparison to Monaco (172 square feet), Hong Kong (237 square feet), New York (280 square feet), and London (334 square feet), the value proposal is clear. Taking into account the proliferation of world-class cultural institutions, healthcare, education, culinary, retail, a booming tech sector, friendly business climate, strategic location, connectivity, no state income tax, and tropical resort lifestyle, it’s easy to understand how Miami was ranked the No. 1 fastest-growing luxury real estate market in the U.S. and No. 5 in the world on Knight Frank’s 2019 “Wealth Report.”
If population growth and migration trends are any indicators, we have every reason to believe that demand for Miami condominiums — and single family homes alike — will continue to soar.
According to U.S. Census data, Florida ranked second overall in terms of fastest-growing states, gaining 950 people per day (usually from tax-burdened states such as New York, Illinois and New Jersey.) Miami will remain an attractive destination for foreign buyers as well, who historically have favored condominiums and are motivated by acquiring property as an income-producing asset or as a second/third home.
A DOER’S MARKET
The COVID-19 global pandemic shall eventually pass. When it does, I believe we will see pent-up demand for Miami real estate unleashed in a fashion to what occurred in the wake of other game-shifting events, such as the Sept. 11, 2001 tragedy.
Rather than see this current period as a buyer’s market or seller’s market, I view it as a “doer’s market.” The opportunity is there for developers, agents, buyers and sellers to get creative and find a way to get deals done. Those who do will reap extraordinary benefits in the long-term.
Master Broker Alicia Cervera Lamadrid is the managing partner of Cervera Real Estate. She can be reached at email@example.com or 305-588-9001.