Some of Miami Beach's priciest real estate is now a relative bargain, even in the billionaire enclave of Fisher Island.
Palazzo Del Sol and Palazzo Della Luna, completed in November 2019, added 93 newly constructed units on Fisher Island, the first in 12 years. Owners of older units are struggling to compete.
Matthew Barnes bought his 1,429-square-foot unit for $1.05 million in 2016 after wanting to live in the wealthiest ZIP code in the country for years. Now, the founder and head of the Erie-based Walten Point Productions and Barnes Limousines is leaving. Barnes and his family are moving to South of Fifth in Miami Beach after selling their two-bedroom, two-bath unit on Fisher Island for $765,000, 27% less than the original purchase price.
"I feel defeated for many reasons on this purchase. I have no idea where the market is going in the short term on Fisher Island, but looking at this investment for a period of another 30 to 50 years, it doesn't fit the portfolio and the projections I am looking for," Barnes said by email.
Other homeowners are pricing units to sell quickly, at times even competing with developer-owned units. According to the Multiple Listing Service, or MLS, in December 2019, a 900-square-foot unit sold for $550,000, and a 1,847-square-foot unit sold for $760,000 in June 2020.
"The price reductions for many of our high-end condominiums are creating opportunities for individuals and families who have been on the sidelines waiting for what they perceive to be a real value," said Ron Shuffield, CEO of Berkshire Hathaway HomeServices EWM Realty, via email. "The oversupply in high-end condos in our markets has existed since 2016. COVID simply brought the supply imbalance into a much clearer focus."
Eight other island units currently are listed between $895,000 and $949,000 in August, according to Elena Bluntzer, real estate adviser at Bluntzer Group. The units range from 670 to 1,429 square feet.
The pandemic is causing sellers to "pull the trigger," Bluntzer said by email. "There are many units on the island that have been lingering on the market for several years. Buyers and sellers seem to have decided to stop waiting to do things. This pandemic has caused people to reflect on their mortality and enjoying life."
Prices have also dropped in Sunny Isles Beach, Shuffield said. Condos priced between $1 million and $1.999 million are seeing the greatest reductions, Shuffield said.
According to the EWM Mid-Year 2020 Market Report, Miami-Dade has about 47 months, or close to four years, of supply of condos priced between $1 million to $1.999 million. That far exceeds the standard for a balance market, ranging between six and nine months.
"The buyers who are now looking to capitalize on this opportunity are from all walks of life, from professionals and empty nesters to millennials," Shuffield said. "They are seeing a unique window to purchase from a wide selection of inventory at solid values and historically low interest rates. Local buyers are finding it much easier today to now 'move up' in size and lifestyle, including many current renters who have been waiting for this moment to purchase."
The plans to build more condos on Fisher Island, Shuffield said, will likely hurt sellers. "We don't need more condos in the county until we've absorbed what we have. We have plenty."
