Miami residential real estate enjoyed an unexpected surge from U.S. buyers last year, thanks in large part to residents from other parts of the country fleeing high taxes, rising living costs, and onerous COVID restrictions. The pandemic fast-forwarded our ability to work virtually, and thousands of buyers realized they could live in South Florida while maintaining business interests in other parts of the country.
This rising tide of Miami home buyers, however, did not “lift all boats” equally. By a wide and dramatic margin, prospective buyers demonstrated much greater interest in single-family homes than in condominiums.
By the fourth quarter, however, as the inventory of single-family homes shrunk considerably, out-of-state buyers turned their attention to the extraordinary pool of Miami condominiums on the market, and the numbers indicate growing momentum in the opening weeks of 2021. Here are some of the factors that are driving this trend.
Condos provide the same South Florida lifestyle for much less: For people who prioritize experiences over possessions, the opportunity to affordably enjoy the South Florida lifestyle makes the choice of condo over single-family home an easy one. Our region is known for its sunny days, beautiful skies, great year-round weather, outdoor activities galore, beaches and so many cool things to do — all of which can be enjoyed regardless of what type of home you choose. For example, in Miami-Dade County, the median price in December for a single-family home was $454,900, while the median price for a condo was $274,500. Similarly, the average price for a single-family home was $952,729 while for a condo it was $527,548. That puts both the median and average prices for single-family homes approximately 1.75 times higher than condos.
Favorable financing terms are available in buildings that pass a lender’s full review, which confirms a condo association’s good fiscal health. First-time buyers can put down as little as three percent, and primary residents as little as five percent. For purchasers of second homes, it’s 10% down. And in 2021, the confirming loan limits to get long-term, fixed-rate mortgages has been increased to $548,250.
Maintenance, insurance, and utilities cost can be lower: Many prospective buyers are turned off by the monthly fees required for condo ownership, but the services these fees cover are often more expensive in single-family homes.
For example, landscaping and pool care included in condo fees can run into hundreds dollars a month for single-family homes. Virtually all condos include water, sewer and refuse services while single-family homes do not. Many condos include cable, internet, hot water and air-conditioning, and while most newer buildings don’t include AC, it is considerably less expensive to cool a condo than a house.
Home insurance is another big money saver — in condos, owners only need to insure the “walls in” of their residences, while the condo association covers the entire structure. According to a local Acentria Insurance office, insuring a median-priced single-family home in Miami built after 2001 would cost approximately $10,064 annually, compared to a median-priced condo policy that costs $1,411. Big difference!
Condo amenities offer plentiful outdoor space and recreation: The vast majority of condos offer large heated swimming pools with accompanying lounge areas, spacious barbecue and picnic spaces, along with other outdoor recreational facilities such as access to waterfront promenades, beach-walks, and the beach — not to mention fitness centers, club rooms, and even markets and restaurants. Safety is another major advantage, typically including on-site security and improved storm standards.
