High-net-worth individuals (HNWIs) from California and New York state are showing increased interest in condos and homes in Miami, said Miami Luxury Real Estate, a boutique real estate Miami Beach brokerage specializing in HNWIs, primarily foreign nationals from Russia, the United Kingdom, Brazil, Canada and other international buyers.
“The real estate market in the United States has been experiencing a slowdown nationally; however, the demand for the luxury market in Miami has increased considerably,” said Maria Kuzina, a broker for Miami Luxury Real Estate.
Based on the recent data obtained from the Miami Association of Realtors, the revenue generated from the sale of houses and condos in Miami has increased significantly. This is also evident from recent statistics that highlight an increase in the sale of townhouses and condos by 3.5 percent, along with an increase in the sale of detached homes by 10.2 percent. Additionally, the figures for the real estate market indicate sales of 1,441 for condo-townhouses, while the recorded number of single-family homes was assessed to be 1,355.
High-earning professionals over the past few years have been observed to acquire luxury homes in Miami. Due to the implementation of stringent tax reforms, buyers from New York and California are flocking to Miami as tax refugees. Consequently, the luxury market in Miami is increasing in value and is observed to be stable, while the prices in New York and California are declining as buyers are more attracted to areas offering lower prices, lower taxes, extra amenities and more space.
Despite the drastic increase in the price of real estate in Miami due to its popularity, it still remains a prospective market to attract more potential buyers from high-tax states such as New York and California.
As compared to the preceding year, the inventory levels of real estate in Miami have increased significantly, which can be seen in an amplification in the supply of single-family homes and condos by 8.7 percent and 2.5 percent, respectively.
Even though the overall sale of luxury homes experienced an upward trend, the existing condo glut was not filled up by the influx of so-called tax refugees. There are numerous indications reflecting a further increase in the market of single-family homes due to the growing preference among buyers from New York and California to acquire large houses in Miami. Thus, the luxury market in Miami offers high value and is expected to remain stable in the coming years.
With plans to establish residency, buyers from California and New York are flocking to Miami as tax refugees, scooping up multi-million-dollar properties to significantly reduce taxes. These buyers mainly comprise CEOs, big-time entrepreneurs, real estate bigwigs and top-earning hedge funders from high-tax states, which include California, New York, Connecticut, Illinois and New Jersey. These states can be subject to an imposition of high income taxes of 13.3 percent, as compared to no state income tax for Miami.
Adapting to the recent flow, numerous brokerages are shifting their strategies toward targeting prospective clients from major cities that are subject to high taxation. Their services are mainly focused on educating agents on establishing residency and purchasing real estate in Miami.