For years, Miami has been referred to as New York City’s sixth borough, and in terms of luxury real estate, the nickname is definitely true. The recent real estate boom in the sunshine state has attracted droves of developers from the Big Apple, bringing with them both NYC buyers and prices. Richard Meier, an 80-year-old architect out of NYC with a laundry list of accomplishments, recently purchased an apartment of his own design. For the first time. Ever. His latest project, the Surf Club Four Seasons in Miami, will be his next home. As for what made him choose this building for his first purchase of his own design, he says, “I thought, well, you know, everyone is going to Miami. This place is jumping. I probably should have done this before. But I designed the building and it is great, and I figured I might as well enjoy it myself.” And he’s not alone, according to a recent article from The New York Times, with two-thirds of the buyers in the project hailing from the great state of New York, their presence greatly influencing the market.
In the last year-and-a-half, real estate prices have risen by 11.5% along the waterfront in Miami. New condos are averaging $1,011 a square foot according to a December market report, up from $907. At the same time, the number of available units has dropped by almost 64%, allowing supply to influence demand in a big way. Simultaneously, the Miami market saw some of the most historically high prices for luxurious penthouses, including the priciest, located at the new Faena, which listed for $60 million. Coincidentally, this same development is where New Yorkers Lloyd Blankfein (Goldman Sachs chief executive) and Leon Black (Apollo Global Management co-founder) recently bought residences. According to Daniel de la Vega, president of One Sotheby’s International Realty in Miami, “$3,000 to $4,000 a square foot is crazy, but it is considered a bargain in some better Manhattan neighborhoods. New Yorkers typically went to Palm Beach for their vacation homes, but now they see Miami as a value so are coming here, driving up prices and creating a frenzy.”
This year, Miami was ranked in the top ten (7th) of most important cities to high-net-worth individuals with more than $30 million in assets. In 2009, the city was just 29th, according to the annual global Wealth Report, published by the real estate brokerage firm Knight Frank. That’s a pretty remarkable jump in a short amount of time. “Miami is no longer the place where my grandma went to retire,” claims developer Richard LeFrak, whose family is responsible for LeFrak City in Queens. Mr. LeFrak currently owns two development site in Miami and is building 1 Hotel & Homes South Beach, where penthouse sales launched recently during Art Basel Miami Beach. Four penthouses were sold during the fair, with three of them going to New Yorkers, who apparently love the weather and the convenient 2 ½ hour flight it takes to get here. While the Miami real estate market is still very flooded with international investors, buyers who originate stateside are coming from New York, bringing their unique charisma and charm, and shaping the market as we know it.