The Q1 preliminary Insight report from Berkshire Hathaway Home Services EWM Realty (BHHSEWM) reports a booming residential real estate market in South Florida during most of 2020 and continuing into 2021.
While the supply of private home inventory stayed at 5.1 months for properties up to $1 million when Covid 19 began more than a year ago, today that inventory is down to 2 months. For condominiums the overall supply of 13.5 months in 2020 is at 7.6 months in Q1 of 2021. Properties of $3 million plus used to linger at 71.4 months. Now that supply is 16.2 months.
Those numbers may become even more favorable for residential sales. "We expect more international buyers and more domestic buyers in 2021," says Patrick O'Connell, Senior Vice President - Business Development, at the BHHSEWM Miami headquarters in Coral Gables.
"International buyers are attracted by low interest and a favorable exchange rate with the dollar," explains O'Connell. As a result, while fewer buyers are expected from Argentina, Brazil and Venezuela which are enduring a decline in the value of their currencies, they may well be replaced by bargain hunters from Europe and Asia who currently enjoy a better dollar exchange rate.
The growth in residential sales is part of an overall economic boom in South Florida, led by technology and venture capital companies moving from more expensive sites in the Northeast or Silicon Valley to benefit from generally lower costs of labor and living expenses.
Florida draws the second highest number of immigrants from other states, following only Texas. According to the 2020 Census cited in the Q1 report, Florida gains a net 661 residents every day, one of 34 states where internal immigration is positive. Sixteen states including New York and California are losing population.
Among many reasons for increased immigration to the South and Southwest, state income taxes seem to be an important factor. Nine states, including Texas and Florida, have no state income tax. These charts illustrate the tax regime in eastern and western sections of the country.
The BHHSEWM report concludes with detailed breakdowns of submarkets in Miami-Dade and Broward counties. Sales are up everywhere, reflecting the pull of South Florida's economic development during the pandemic.