Miami Spin Cycle

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For most people today, the Miami real estate market is much like a spin cycle. Many talk as if they have been wiped out and got worked until they do not know which way is up. And yes, some have been wiped out, but really only due to their own greed.

So let’s look at a few notable deals in the Miami Beach area that closed in the past month.  We start with the luxury segment of the real estate market and North Bay Road. The magnificent old-world Mediterranean estate located at 5396 N Bay Road, with 6,977 square foot of living area and 79 feet of water frontage on the bay, traded for a price of $6.8 million. The buyer out of New York paid a handsome $975 per square foot and took out a $3.8 million mortgage from Bank of America for a property that last traded in July of 2005 for $5.0 million.

In Miami Beach, we also had three impressive waterfront land deals this past month.  The three properties located at 1339 N Biscayne Point Road, 3370 Chase Avenue and 4567 Pinetree Drive, each traded hands for $98, $102 and $99 per square foot respectively.  The sale of 4567 Pinetree Drive for $12.1 million, an unusually large 3-acres vacant parcel, with about 300 feet on the water, really stands out. This property was purchased by Seth Gerszberg, founder of hip hop T-shirt company Ecko, for $9 million or $74 per square foot, at practically the peak of the market in July 2004. 

This supports our previous findings that while the luxury segment has seen some lack of demand and stagnant prices, that there are still buyers out there that recognize the value, uniqueness and potential in Miami Beach waterfront property.  Alternatively, by looking just a little further north up Collins Avenue, to the quiet seaside village of Surfside, we find a very different story. 

My analysis of three recent sales of single family homes, all with identical size lots, and similar in age and size, revealed that all three traded at an average decrease in value of 37% of the most recent sale, of which two traded in mid-2006 and one in mid-2005.  The sale prices ranged from $239 to $281 per square foot, or $335,000 to $450,000.  I recognize that for many of you that you may consider that a hefty price tag, but one has to consider that many of these homes sold for almost double that amount just a few years ago.

Now I don’t know about you, but I think it’s beginning to smell like opportunity around here!

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