Luxury Million Dollar (and Up) Homes in Demand

Southeast Florida’s million-dollar homes are in high demand, accounting for a larger share of home sales and selling more quickly in 2023 compared to the pre-pandemic years. Sustained migration from wealthy and home-equity rich buyers from states like New York, New Jersey, and California, and the growth in high-paying jobs in the area are sustaining the demand for and the fast-turnover of these million-dollar properties.

When billionaires like Ken Griffin and Jeff Bezos make Miami their home, one can expect a major impact with more jobs, more opportunity, more development on the horizon for South Florida. There is no questions that the Miami market is getting a serious upgrade. No doubt, the Magic City was undervalued for years for an international city on the water, but there is now no turning back as the numbers tell us.

• In 2023, Single-family million-dollar homes typically sold in less than two months

• 20% of single-family homes sold in Miami-Dade, Palm Beach, and Martin Counties in 2023 were million-dollar homes. This is a huge jump from pre-pandemic levels where Miami-Dade SFH sales over $1M was 17%.

• Cash buyers dominated the million-dollar condo/townhome market, at 80% average share over South Florida. In Miami, it was 48% in 2023.

• Inventory of million-dollar homes is below 10 months. This is significantly less than pre-pandemic levels, but up from last year. Low inventory is creating a huge opportunity for new developer sales.

• In 2023, the top 5% of single-family home sales prices, which can be considered the luxury market segment, rose to at least $2.3 million ($1.1 million in 2019). The top 1% of single-family home sales prices, which can be considered the high-end luxury segment, rose to at least $6.2 million ($3 million in 2019), among homes listed on the MIAMI MLS.

• For condo/townhomes, the top 5% of home sales was at least $1.6 million ($0.9 million in 2019) while the top 1% of sales was at least $4.3 million ($2.6 million in 2019).

Positive Outlook for the Luxury Home Sales in 2024  

Southeast Florida’s robust economy and its allure to both retirees for its low taxes (zero state income tax) and to businesses expanding or relocating to the area all combine to drive the demand for luxury housing.  

According to the 2023 USA Wealth Report, the city of Miami and Miami Beach combined had the 4th fastest growth in its millionaire population, with a 75% increase during 2012-2022. As of 2022, the area combined was home to 38,000 millionaires, 160 centi-millionaires ($100M+ assets) and 12 billionaires as of 2022. West Palm Beach, had the highest growth, at 90%, with its 9,400 millionaires, 64 centi-millionaires, and 6 billionaires in 2022.  

A more stable economic environment is expected to ensue in 2024 as interest rates stabilize, with a high possibility that the Federal Reserve Board will start to pare back its interest rate hikes in the second half with inflation likely to move towards the Fed’s 2% target. Falling rent growth, a more balanced labor market, and slower consumer spending are factors that will ease inflation. A favorable economic environment improves the outlook for business expansions, job creation, and migration into Southeast Florida, leading to a recovery in overall home sales and sustained growth in the luxury segment. 

What does my $3M get me?

Among $3M+ single-family homes sold through the MIAMI MLS in 2023, 41% were waterfront properties while 91% of condominium/townhomes were waterfront properties. Single-family homes that sold for $3M+ typically had 5 bedrooms and 5 baths with a living area of about 4,600 sq. ft. Among $3M+ condo sales in 2023, units typically had 3 bedrooms with 4 baths and a living area of nearly 3,000 sq. ft.