MIAMI–The tax reform legislation may be at least in part behind a rise in Miami luxury homes this quarter, according to the Miami Association of Realtors. To be sure, median pricing for such homes have risen for the 25th consecutive quarter but the number and pace of growth is higher this quarter compared to the same period last year.
The Miami Association of Realtors reports that total Miami luxury home sales — homes worth $1 million and up — rose 12.3% in 1Q 2018 to 421, up from 375 in 1Q 2017. Miami single-family luxury home sales jumped 16.2% in the first quarter, rising from 185 transactions to 215. Miami existing condo luxury home sales increased 8.4% year over year from 190 to 206.
“Miami real estate continues to see major pent-up demand for luxury properties,” said George C. Jalil, the 2018 MIAMI Chairman of the Board, in a prepared statement. “Miami and Florida as a whole is attracting Americans leaving high-tax states such as New York as the new tax law cuts into their income-tax deductions.”
The tax reform law set a deductions cap for income, sales and property taxes at $10,000. The realtor group maintains that the new cap is leading more residents of states with high property values and state income tax to purchase properties in states such as Florida, which has no state income tax.
If so, these transplants are not buying average-priced homes or condos. The report found that total existing Miami-Dade County residential sales declined 6.5% year-over-year in the first quarter, from 6,169 to 5,770 for a total sales volume of $2.6 billion, a decline from the $2.7 billion sales volume a year ago.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
