Sales for SOBE Luxury Homes spiked 130% this year, due to a recent surge in pre-construction projects, like Faena House, pictured above.

By Natalie Terchek

According to the results of the most recent SOBE Luxury Homes Trend Report for Fourth Quarter of 2012, it appears as though the Miami real estate market is off to a strong start.

The analysis was from studying sales data across three different property markets: Miami Beach Luxury Condos, Miami Luxury Condos and Luxury Single Family Homes in Dade County. The data is analyzed across three different points in each property market: Chic Luxury ($500,000-$1,000,000), Super Luxury ($1,000,000-$3,000,000) and Ultra Luxury ($3,000,000 and above).

According to Christian Kawas, Principal, Realtor Associate of SOBE Luxury Homes, fourth quarter is traditionally the beginning of sales season, and it has been extremely strong this year. He says a lot of it is due to the continuing strength of the international market–specifically Russians and Mexicans as the newcomers. He also said there are a large amount of New Yorkers buying high-end properties, as well as Midwest demographic that has not traditionally moved to south Florida.

“Due to growth of Miami, it is no longer a beach town,” Kawas said. “It is a city with art, entertainment and fine dining. There are more options with residences and a larger variety of buyers.”

Trends in the SOBE Luxury Homes Report

The SOBE Luxury Homes Trend Report showed that sales spiked 130 percent this quarter in sales year over year in the Ultra Luxury Market. The activity in this segment is a strong indication of the recent surge in pre-construction projects, such as Faena House and The Edition Residences located in Miami Beach.

“Prices have gone up, we’re seeing more and more property come on the market,” Kawas said. He also says people are looking for larger spaces, and the floor plans are much larger to accommodate families and nannies. “You don’t see one-bedroom condos anywhere. There are very wealthy people putting 50 to 60 percent down payments in cash, looking to hold these investments for a long time.”

The report also mentions that prices have increased by nearly 9 percent across all categories, and closed sales in the South Beach condo market averaged a record setting $1,931 per square foot. Since the first quarter is usually the strongest, Kawas definitely expects to see this number continue to rise in 2013, and even in 2014.

With the large increase of buyers and closings, inventory levels have been reduced by 40 percent, giving increased leverage to sellers. Kawas says the resale market picks up a lot of speed, and the transaction volume grows every month.

Strong Market Expected in 2013

According to Kawas, purchases in the market are much more predominant than the previous cycle. He expects the market in 2013 to remain strong.

“It’s going to be a solid market, and it is a good time to get in a buy a property right now,” Kawas said. “The trend is that properties are going to go up in value as inventory keeps shrinking. It will be interesting to see where we are two years from now.”