Shrinking house and condo sizes dragged down luxury sales prices in South Florida’s most expensive pockets in the second quarter.
Affluent home buyers around Miami drove luxury house prices down as they opted for more humble residences, according to data released Thursday.
The average house sold in Miami Beach and its barrier islands was 20% smaller in the second quarter of this year than a year ago. Even lavish condos, which make up the majority of high-end sales in Miami Beach, got smaller. The average unit was only 89% as big as those sold a year ago, according to quarterly reports from brokerage Douglas Elliman and appraisal firm Miller Samuel.
The reports define luxury as the top 10% of sales in any given area.
The more demure Miami Beach mansions—which still averaged a mammoth 7,500 square feet—pulled down the median sales price of luxury single-family homes by nearly 20% compared to a year ago, to $8.662 million, according to the report.
South Florida has undergone significant shifts in demand for high-end homes over the past several years, as South American buyers pulled out of the market and a surge of domestic buyers came in from high-tax northern states, Mansion Global has reported.
Whether it’s a lasting change in the needs of wealthy buyers or a fleeting coincidence, the trend toward smaller residences in the second quarter wasn’t confined to Miami Beach.
On the mainland, sales of palatial coastal homes also shrunk. The average luxury house was 400 square feet smaller than a year ago. As a result, buyers paid 12.5% less in the second quarter than last year.
One of the most dramatic swings in home size was recorded north of Miami in Palm Beach, home to President Donald Trump’s lavish Mar-a-Lago resort.
The size of the average home shrunk by more than one-fifth, to 4,375 square feet—still double the size of the average home in next-door Fort Lauderdale.
But size doesn’t really matter, as far the health of South Florida’s housing market is concerned, since total sales—both condos and houses—are up or only slightly down compared to last year in the areas covered by the report.
“We continue to see growing, tangible evidence that the market is continuing to strengthen,” said Jonathan Miller, president of Miller Samuel and author of the report.
Overall, the South Florida market is stable, said Jay Phillip Parker, chief executive officer of Douglas Elliman’s Florida brokerage, in the report.
“I am confident that the third quarter will reflect significant improvement as we continue to see the interest in South Florida’s favorable tax laws and mortgage rates being at a substantial low compared to last year,” Mr. Parker added.