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2020 Q4 REAL ESTATE ANALYSIS



2020 Q4 REAL ESTATE ANALYSIS

In the last quarter of 2020, real estate in Miami showed us a sneak peek of how the market is going to develop this 2021.

Most Americans buy with mortgages, and the fact that mortgage rates hit another record low leaving a 2.65% fixed-rate in January 2021, shows that the market will keep on moving.

In the last quarter, as shown in the pie chart hereafter, out of all sales in Miami, Brickell has shown to be the preferred neighborhood with a 36% of all recorded sales. This means that 1 out of every 3 sales in the city is in Brickell. Edgewater follows with 18%, Miami Beach and Sunny Isles with 17%, and Aventura with 12%.

The condo market is still a buyer's market, with a total inventory of 15.6% of available units on the market compared to existing units. However the inventory is decreasing and when it goes below 10% it will become a seller's market. The condo sales in the last quarter of 2020 showed an increase of 37.65% of sales compared to the same period in 2019.

The Miami Real estate transaction increased by 100.72% in 2020 compared to 2019. As explained in the chart below, Americans from the Northeast are buying in Miami. This trend has drastically changed compared to 10 years ago when the demand for South Florida came from Latin American buyers. This is a trend never seen before, and the projections for 2021 is an increase of Latin American buyers in Florida, as soon as the borders open since we have a weak dollar right now.



LOW HOUSE INVENTORY IS DRIVING HOMEBUYERS TO LUXURY CONDOS

Lately, we've been talking about how the demand for high-end single-family homes in Miami has been through the roof. The demand is so high that the supply is not keeping up and homebuyers are shifting to condos now.

High-income earners are relocating to South Florida every day and quick condo closings are the new trend. The last quarter of 2020 showed an increase of 30% of luxury condo sales year over year.

There is also a new tendency we are noticing in the luxury real estate condo market and which is the wish of buyers to close deals quickly. Wealthy buyers are coming into town and making the decision faster than ever before, they are now relocating and not only buying a second or third home.



STOCKS VS. REALITY IN THE NATIONWIDE REAL ESTATE MARKET

A healthy real estate stock market is a balance between economic movement and good employment levels. If those two factors are stable, the index will hold gains.

This is the current situation of the real estate market in the U.S. After president-elect Joe Biden announced the proposal of a $1.9 trillion stimulus to the economy, the real estate stock market boosted.

However, in reality, real estate nationwide might be hampered by the inflationary impact of this announcement. Here are some examples of diverging stock trends compared to the industry itself.

Stocks vs Industry:

Hotels: Hilton Worldwide showed an increase of 36% since summer 2020 as investors anticipate a recovery after vaccinations. In reality, in the U.S. the hotel occupancy has decreased by 37% year-over-year.

Malls and traditional real estate: Simon Property Group (the biggest mall owner in the U.S.) stocks increased in January after the company announced a $550 million debt. After COVID shopping from home becomes the preferred shopping method which has forced hundreds of stores to close.

Offices: the New York office giant, SL Green, stocks ended in positive territory in January. However, even if offices are having a high rent collection rate, the fact of more companies embracing home offices is presenting a big challenge.



MIAMI MAKES IT TOP-10 OF THE HOTTEST HOUSING MARKETS IN 2021

According to the 2021 projections for the housing market, Miami is expected to be the number 10th of the hottest cities to relocate to in the U.S.

Almost all the cities on the list have the same characteristics: spacious homes, affordable housing prices, booming economies, and sunny weather. Miami checks all the above, which is why so many locals have decided to migrate and relocate here.

The fact that the pandemic has increased the flexibility that people have to decide where to live has made local migration levels rise and Miami has shown low mortgage rates and a good level of inventory which has made it one of the hottest housing markets where to go.

Leading the list is Austin texas, followed by Phoenix, Nashville, and Tampa. On the contrary, those cities that are expected to fare worse are New York, San Francisco, and Los Angeles.



BAIA BEACH CLUB

Baia Beach Club recently opened and is definitely a To-Go place in Miami. For you, I tried it last week

Handcrafted cocktails with fresh ingredients, Mediterranean food, boat slips available, and a perfect location at the Mondrian Hotel in South Beach makes Baia Beach the ideal place to spend your weekend or simply enjoy the sunset while having dinner.

This bayfront oasis has a gorgeous pool and a large deck with cabanas open every day offering breakfast, brunch, lunch, and dinner options. The sushi was very good as well as the sweet potato fries. However, when they put the soy sauce in a plastic container the glamour of the place falls deep down!

DEAL OF THE MONTH: YACHT CLUB AT PORTOFINO #1105

Price: $460,000

1 bed / 1 bath

Ocean and city views

780 sqft

$621/sqft

Maintenance fees: $715/ month