Q3 2022 Luxury Condo Market Summary: Seasonal Slowdown Takes Over, Sellers Still Hold Advantage

Q3 2022 Luxury Condo Market Summary: Seasonal Slowdown Takes Over, Sellers Still Hold Advantage

Oct 26, 2022 October 26, 2022

After spending almost two years in overdrive, Miami’s luxury condo market is catching a much-anticipated break. With signs of a cool down emerging this summer, sales for the third quarter – historically the slowest of the year as per data – have dropped to about half compared to the previous year, as well as the previous quarter.

However, as predicted in our Q2 2022 summary report, the market has maintained its growth threshold – Q3-22 sales volume is still higher than any comparable quarter from 2020 or before. Other indicators are also still positive – we see an increase in year-over-year Price per Square Foot, a decline in year-over-year Days on Market, and Inventory is still within its ideal range of 9-12 months. 

The take-away? While sellers still remain in control of Miami’s luxury condo market, if sales continued at their present pace, inventory levels will likely increase and we will see the market down-shifting to a more balanced position in the upcoming quarters. 

Here are some key stats for Q3 2022:

Q3 2022 Overall Miami Luxury Condo Market - Closed Sales: 315

  • Year-over-Year Change in Closed Sales: -41.2% (315 vs 536 sales in Q3 2021)
  • Quarter-over-quarter Change in Closed Sales: -58.8% (315 vs 765 sales in Q2 2022)

Q3 2022 Overall Miami Luxury Condo Market -  Median Sales Price: $1.55M

  • Change in Median Sales Price: -3.6% (Q3 2022 vs Q3 2021)


Q3 2022 Overall Miami Luxury Condo Market - Inventory: 9 months



Q3 2022 MIAMI LUXURY CONDO QUARTERLY MARKET SUMMARY

 

Number of  Sales

% change  in Sales

Median  Sale Price

% change  in Median  Sale Price

Median  SP/SqFt

% change  in Median  SP/SqFt

Median  Days On Market

Q3-2022

315

-41.2%

$1,550,000

-3.6%

$913

+9.3%

60

Q3-2021

536

$1,607,500

$835

80


As real estate experts, we’ll again be keeping a close watch on the next two quarters to see if this quarter’s slowdown is part of a seasonal break or signs of a more serious correction. Until then, we expect domestic and international buyer demand to carry on fueling the luxury condo market with more wealthy families, deep-pocketed professionals, businesses migrating to Miami, and South Americans fleeing political turmoil, all driven by luxurious waterfront options plus our tax-friendly and safe-money landscape.

Read on for a closer look into a neighborhood breakdown of our quarterly findings for Q3 2022:

For the purpose of this Miami luxury condo market report, we've only included properties priced $1 million and above. The neighborhoods included in this market summary include Downtown Miami, Edgewater, Wynwood, Midtown and the Design District, Brickell, Coconut Grove, Coral Gables, Key Biscayne, Miami Beach, Fisher Island, Surfside and Bal Harbour, and Sunny Isles Beach.


Q3 2022 - Miami Luxury Condo Market Sales



Overall sales drop 41.2% from all-time record high in Q3 2021

Our luxury condo market’s 8-month growth spurt has, quite expectedly, come to a pause this third quarter. With 315 sales overall, Q3-22 volumes are 41.2 % lower than the previous year’s record-high of 536 sales. Comparing quarter to quarter, sales dipped 58.8% from 765 in Q2-22 to 315 sales in Q3-22.

Still, looking at third-quarter numbers from 2020 and before (watch out for our in-depth luxury condo market report for Q3 2022), the luxury condo market maintained its growth threshold in spite of this dip. Not to forget, the third quarter of the year is generally the slowest in Miami in terms of sales (based on historical data). This makes Q4-22 numbers a critical piece in the puzzle as to whether we’re looking at a crash or a correction, the latter of which is more likely.


Neighborhood Sales at a Glance
 

Neighborhood

Q3-2022

Q3-2021

% Change

Greater Downtown Miami*

106

162

-31.6%

Miami Beach**

181

318

-43.1%

Coconut Grove & Coral Gables

28

63

-55.6%

*Greater Downtown Miami is inclusive of Edgewater, Brickell & Downtown

**Miami Beach is inclusive of South Beach, Mid-Beach, North Beach, Surfside & Bal Harbour, Sunny Isles & Fisher Island.


Looking at a neighborhood sales comparison (above), the combined neighborhood of Coconut Grove & Coral Gables (-55.6%) plus Miami Beach bore the brunt of the slow down (-43.1%). The Miami Beach neighborhoods (collectively) were the first to show signs of a slow down with momentum dropping consistently over Q1-22 and Q2-22. 

In Q3 2022, Greater Downtown Miami (mainland grouping) emerged as the most resilient market, reporting a 31.6% decline in year-over-year sales – likely with affordability, new inventory and proximity to work playing a key role. 

Posting a brand-new trend, Mid-North Beach and Brickell topped the charts by reporting the least negative impact on year-over-year sales. Mid-North Beach reported only a 21% setback in year-over-year sales (37 in Q3-22 vs. 47 in Q3-21), while Brickell followed close with a 22% setback (72 in Q3-22 vs. 92 in Q3-21). Sunny Isles Beach reported the maximum sales volume of all neighborhoods under review, closing the quarter with 80 sales. 

With the overall market losing steam, it comes as no surprise that the trendline tracing sales over the past 12 months shifted gears again - going from a positive curve in Q2 to a negative in Q3. Except for Downtown Miami, all Miami neighborhoods in our analysis reported a negative 12-month trendline – indicating that the fourth quarter is likely to come in soft as well.


Q3 2022 - Miami Luxury Condo Market Prices



With the market still favoring sellers, price per square foot trends continued reporting an uptick. All Miami neighborhoods under our review reported year-over-year price gains - except Downtown Miami and South Beach (flat).

Luxury condos in the combined neighborhood of Surfside and Bal Harbour again reported maximum gains for sellers, closing Q3-22 with the highest percentage increase in their year-over-year Price per Square Foot. Prices in this sub-market increased from $906 in Q3-21 to $1,205 in Q3-22 - reporting a 30% gain.

Fisher Island continued being the most expensive zip code for luxury condos with a price of $1,835 per square foot, while Downtown Miami emerged as the most affordable neighborhood with a median price of $704 per square foot.


Price per Square Foot at a Glance

Neighborhood

Q3-2022

Q3-2021

% Change

Greater Downtown Miami*

$829

$751

+10.4%

Miami Beach**

$1,072

$976

+9.8%

Coconut Grove & Coral Gables

$756

$689

+9.8%

*Greater Downtown Miami is inclusive of Edgewater, Brickell & Downtown

**Miami Beach is inclusive of South Beach, Mid-Beach, North Beach, Surfside & Bal Harbour, Sunny Isles & Fisher Island.


Q3 2022 - Miami Luxury Condo Days on Market



Even with sales slowing down, the Days on Market for luxury condos dropped over Q3 2022. At 60 days, luxury condos in Miami sold 25% faster than a year ago (80 days in Q3-21).
 

Most Miami neighborhoods under analysis posted a decrease in the number of days luxury condos spent on the market before they were sold. Taking only 32 days to sell, the combined neighborhood of Surfside and Bal Harbour emerged as the fastest-selling market this quarter.

On the other hand, Fisher Island and Sunny Isles Beach deviated from the trend, reporting an increase in their days on market data, which we will follow up on in our detailed Q3 2022 luxury condo market report for Miami Beach.


Days on Market at a Glance
 

Neighborhood

Q3-2022

Q3-2021

% Change

Greater Downtown Miami*

56

86

-34.9%

Miami Beach**

68

82

-17.1%

Coconut Grove & Coral Gables

42

62

-32.3%

*Greater Downtown Miami is inclusive of Edgewater, Brickell & Downtown

**Miami Beach is inclusive of South Beach, Mid-Beach, North Beach, Surfside & Bal Harbour, Sunny Isles & Fisher Island.


Q3 2022 - Miami Luxury Condo Market Inventory



Overall Inventory Stays Low at 9 months

For the first time in months, Inventory has increased. Up to 9 months from 8 months last September and 6 in June (Q2-22 closing), inventory went up a notch. Of all the neighborhoods under review, the combined neighborhood of Coconut Grove and Coral Gables reported the lowest months of inventory (6 months), with Mid-North Beach (7 months) following closely.

As real estate experts, we consider slower sales to be the only factor powering this increase for now, since the third quarter saw only two newly-built luxury condos join the market - The Estates at Acqualina in Sunny Isles & Villa Valencia in Coral Gables.


Inventory at a Glance

Neighborhood

Q3-2022

Q3-2021

% Change

Greater Downtown Miami*

12

10

+20%

Miami Beach**

9

8

+12.5%

Coconut Grove & Coral Gables

6

5

+20%

*Greater Downtown Miami is inclusive of Edgewater, Brickell & Downtown

**Miami Beach is inclusive of South Beach, Mid-Beach, North Beach, Surfside & Bal Harbour, Sunny Isles & Fisher Island.


Q3 2022 Miami Neighborhood Luxury Condo Market Summary



We expect Miami’s luxury condo market to enjoy solid demand from out-of-towners as well as foreign buyers for the interim. Even if the market is headed for a correction, there is no crisis or even signs of a crisis in the Miami real estate market. Also, with most of the pandemic behind us and travelers ready to enjoy the upcoming Art Basel and its satellite events in December, we expect sales to receive a little boost by the tail-end of Q4-22.

We further expect factors such as Florida being a safe haven for foreign buyers looking to flee from political winds back home, coupled with our tax-friendly policies driving big business migration (such as Ken Griffin’s Citadel) to continue fueling demand.

Anecdotally, we are seeing a little seller hesitation considering the recent increase in mortgage rates. With interest rates moving up, some sellers are choosing to hold onto their properties that were purchased with lower mortgage rates, or recently refinanced with lower rates. This, coupled with fewer deliveries of newly-built condos scheduled in the next 1-2 years could help keep a check on supply.

Taking all of the above into account, we expect the market to be mostly seller-friendly until the end of 2022 at least, even as inventory posts a slight uptick. Moving forward, even if the market is in a correction, we expect it to shift to a more balanced position. Any increase in inventory, however, is expected to offer buyers the perfect wiggle room with a bit more selection at hand and a little less competition compared to recent months. 

Additionally, in the coming quarters we will start to see more new luxury condo product come to market as the dozens of new condos start getting completed. 

Sellers can still take advantage of the luxury condo market in Miami, knowing that there is healthy buyer demand, and pricing their properties with stable prices and a potential market correction in mind.

To stay tuned for our exclusive, in-depth analysis of the Q3 2022 luxury condo market in Miami, subscribe to this blog as we roll out separate reports for the overall Miami market, Miami Beach, Greater Downtown Miami, and Coconut Grove plus Coral Gables neighborhoods.


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If you have specific questions about this data, or want a market assessment of your property, please reach out to us directly or via our social media @blackbookproperties.

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