Florida’s Luxury Real Estate Market

Florida’s Luxury Real Estate Market

Florida is an increasingly popular location for luxury home ownership, thanks to its warm climate and beautiful beaches. Additionally, its vibrant economy attracts people from around the globe looking to relocate there.

Florida’s attractive tax environment and lifestyle amenities continue to attract wealth migration, fuelling a lucrative luxury property market.

1. Affluent Buyers

Florida is widely considered an international luxury real estate destination for affluent buyers from across the world, and Miami-Dade County saw sales of homes worth $1 million or more increase during its first quarter 2023 when compared with fourth quarter sales of such properties.

These individuals are migrating to Florida for its favorable business climate, tax laws and lifestyle amenities. Affluent buyers also tend to prioritize sustainable properties and are willing to pay premium prices for these.

Florida’s luxury market continues to gain steam despite slowing overall home buyer demand due to rising mortgage rates and economic uncertainty. Parkland, in particular, has dropped off of Florida’s list of “millionaire cities”, while Pinecrest and Surfside continue to see significant spikes in interest for homes worth over one million dollars.

2. Expansive Real Estate Inventory

Florida provides plenty of luxury home options to affluent buyers searching for their ideal residence. As one of the state’s four highest-population states, it boasts a selection of exclusive areas like Palm Beach and Orlando with access to luxury properties.

Douglas Elliman released in early 2023 reported that Utah’s luxury market remains strong despite an 8% decrease in luxury single-family home sales, thanks to low inventory levels and stable pricing trends.

Are You Selling Luxury Real Estate? Are You Are looking to sell their property, it may benefit them to speak with a luxury real estate professional in their local area about setting a fair price. Overpricing can cause potential buyers to lose interest and extend your listing period which can be especially challenging in luxury markets where prices tend to increase more gradually over time.

3. Affordability

While overall home buyer demand has decreased since the pandemic, luxury real estate remains a strong segment of the real estate industry. Mortgage applications and interest rates may have fallen since 2013, yet luxury homes remain more cost-effective in most locations across the nation than nonluxury ones.

Luxury markets continue to draw high-net-worth buyers from all over the globe. Investors looking for bargains may still find great opportunities in areas less pricey than Miami and Palm Beach barrier islands.

Sarasota, Florida stands as an exemplar. This coastal resort town recently earned one of the fastest-growing luxury markets in America.

4. Affordability of Financing

Florida’s luxury real estate market is expected to remain highly competitive throughout 2023. Affluent buyers seek properties that provide privacy, wellness and energy efficiency features as well as smart home capabilities that enable remote management.

Buyers in Florida’s desirable areas will seek properties with waterfront views and private docks, in addition to amenities that promote wellness such as yoga studios, home spas and outdoor relaxation spaces.

However, many buyers remain priced out of the luxury market due to rising mortgage rates, inflation and financial market instability – leading to reduced demand across many metro areas. Supply of $1 million-and-up single-family homes and condos declined significantly in 39 cities; those seeing the largest reductions include San Jose; Oakland; Anaheim.

5. Affordability of Maintenance

Luxury homes are often designed with both form and function in mind, often custom-built using premium materials with luxurious finishes inside and out. In addition, many feature open floor plans with plenty of windows.

But even as demand for luxury homes continues to increase, rising mortgage rates and limited inventory could slow the market significantly. A report from The Keyes Company and Illustrated Properties noted that $1 million-and-up single family sales declined 19% year over year in Q1 2023.

Knight asserts that, despite these setbacks, South Florida real estate continues to attract luxury buyers. She anticipates waterfront homes being among the first properties to recover when market conditions improve.

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