A boom in mansion construction is still going strong in the Miami area, according to CNBC, although there are "signs of strain" in the local real estate market, with inventories rising and prices remaining elevated.
The median sales price for condos in Miami Beach and the Barrier Islands declined slightly during the second quarter to $335,000. At the same time, the median price for three and four bedroom houses increased more than 20 percent. This growth in buyer demand for more features is consistent with broader trends in the U.S. residential real estate market, which this blog examined in a previous post.
The source also called attention to disparities between different parts of the market, noting that high value deals in exclusive communities continue to skew average prices, and that property values have been rising much more rapidly in highly desirable areas. CNBC's Robert Frank predicts that the market "may be due for a little cooling off" as new condos add to the available inventory, which has been expanding despite strong demand.
Median San Francisco property value hits $1 million benchmark
On the other side of the country, sales of luxury condos and houses continue to occupy a larger share of the market in San Francisco. A recent report from Paragon Real Estate Group noted that sales of luxury homes, defined as single family houses sold for at least $2 million and condos sold for at least $1.5 million, hit a new peak during the second quarter, exceeding the previous high point reached in 2007.
This pushed the median price of a home in the city above $1 million for the first time and it seems that property values will continue to climb as recently built luxury condos hit the market. According to San Francisco Chronicle columnist Kathleen Pender, many of the units in the city's largest new luxury condo developments have yet to hit the market. She noted that 10 units in a 19th street development have been listed this year, with a median sales price of more than $1.7 million.
Demand is apparently being driven by wealthy foreign investors and local tech professionals with high incomes, which is making it hard for prospective buyers with limited cash reserves to make offers that sellers find attractive.
As construction firms in these hot markets focus their attention on high value development, the concentration of resources within the local industry can affect the cost of replacing insured structures. To account for local variations in construction costs, insurance carriers need a single valuation system that is capable of providing accurate replacement cost estimates for any size and type residential, commercial or farm & ranch properties.
e2Value offers an estimator that was specifically designed to be used for condo and co-op units. Our A&A (Additions & Alterations) tool allows users to select the extent of the coverage, for example whether appliances, lighting, wall coverings and more, are included or not. Our A&A estimator works for condos and co-ops of any size or value where the insured structure does not include the roof, foundation or exterior walls. We also offer a full range of replacement value solutions for other residential, commercial and farm & ranch properties.