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Three Cents Worth: Less Negotiability = More Price Pressure

[This week, real estate appraiser, Curbed graph guru, blogger, and podcaster Jonathan Miller puts in another installation of his Three Cents Worth column, with his unique perspective on Miami's strange real estate market]

Although we released our Miami market report a few weeks ago for Douglas Elliman, I thought it would be helpful to expand on some of the data compiled for the report to shows some general trends. Yes there are many, many submarkets such as condos, single family, distressed, non-distressed and regions to parse out, but hey, this is Curbed Miami!

Some of the primary characteristics of the recent Miami housing market has been the frenzied pace and the increasing frequency of record prices either on a price per square foot basis or actual price - so I took a look at average sales prices and negotiability (aka listing discount) since 2006 for context.

Average sales price Prices clearly "bottomed" in late 2010/early 2011 and have been pressing upward since then. However as much as we read about record sales prices such as $40M+ and record per square foot numbers such as $3,000+, the overall average sales price is 32.9% BELOW early 2008, just before prices collapsed. The new product and emphasis on luxury sales has not been enough to skew overall prices above levels seen in the prior boom (obviously a bunch of new development has yet begun to close). Still, we've got a long way to go.

Listing discount (negotiability) The percentage difference between the sales price and the listing price at time of sale has consistently declined since prices bottomed. In other words the spread between what sellers are pricing their properties for and what buyers are willing to pay is narrowing - ie buyers and sellers are more in sync (not necessarily happy with each other). With inventory limited, buyers are now more willing to come up in price to meet sellers price expectations. It makes sense. Less negotiability between buyers and sellers is pushing prices higher without the benefit of free money (ie credit) that characterized the prior boom.
· Matrix [Miller Samuel]
· Three Cents Worth archives [Curbed Miami]