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The Coconut Grove residential market remains in high demand as the median price of single-family homes increases 21% due to lack of inventory.
In September, October and November, said Ron Shuffield, chairman and CEO of Berkshire Hathaway HomeServices EWM Realty, “the median price of a single-family home in Coconut Grove, ZIP code 33133, was $2.05 million.” If you look back just a year ago, over that same three-month period… the median price was $1.7 million.
Twenty-nine homes sold for a median price of $2,050,000, while 36 sold for a median price of $1.7 million in the previous year. This increase in value is greater than the county’s overall gain, as the median sales price of single-family homes in the county increased from $565,000 to $613,000.
“We’ve seen a 21 percent increase in the value of a single-family home (in Coconut Grove), but we have to keep in mind that when I look at the entire county, it’s across all price ranges, all neighborhoods,” Mr. Shuffield said. “Neighborhoods that are the best, neighborhoods that are average; but for single-family homes countywide during the last quarter, September, October and November, the value increased by 9%, while in Coconut Grove, the value of single-family homes increased by 21%.
There is a direct correlation between increasing home values and lack of inventory.
“The increase in value is greater than that of the county as a whole due to the attractiveness and very limited supply of properties in Coconut Grove,” Mr. Shuffield said. “Coconut Grove is a very small place, and the more people want to buy there, the more it will put upward pressure on prices. But as we start to increase inventory and interest rates come down, that will attract more buyers.
Other professionals have noted a slowdown in the real estate market due to interest rates and lack of inventory.
“Today’s residential market is in what we call this classic real estate paradox, where buyers who want to buy have been a little hesitant because of interest rates and sellers don’t need to sell and don’t don’t want to sell. because they got low interest rates and there’s not much desire,” said David Siddons, president of the David Siddons Group at Douglas Elliman. “We are in a tragic situation with a lack of stocks. Produces when it’s available, when it’s good, it flies. The problem is that we simply don’t have enough of it. »
Although optimal market supply is six to nine months of monthly sales for the entire market, in a market like Coconut Grove where median prices are higher, the optimal number of months of supply differs, a Mr. Shuffield said.
When “we deal in markets where the average median price is $2 million, we feel comfortable if we have 12 to 18 months of supply. And today we are at the low end: 12 months of supply,” Shuffield said. “But we’ve increased that number quite dramatically since the spring of this year. In the spring of this year, we only had three and a half months of supply and…in November alone, 15 months of supply, so we’re seeing our months of supply increasing because our number of new registrations is increasing.
If months of inventory continue to increase, a change in pricing may be observed.
“Prices will continue to be affected by inventory levels, and once we increase our months of supply beyond those 12 to 18 months in Coconut Grove, we will start to see prices start to really stabilize and, in some cases, probably decrease. a little bit,” Mr. Shuffield said.
The median price of condos sold in September, October and November in Coconut Grove was $1,240,000, and a year ago, during the same three-month period, the median price was $821,000, a increase of 51%, Mr. Shuffield said.
Despite rising prices in the Coconut Grove real estate market, sales are increasing.
“In Coconut Grove… for single-family homes, townhomes and condos, what we’ve seen year over year, there’s been about a 21.2% increase in sales in terms of number of sales closed year over year,” Carlos said. Villanueva, district sales manager for the Keyes Company’s Coral Gables and Coconut Grove offices. “We also saw an increase in cash sales of approximately 56.3%. This is largely due to higher interest rates. Recently, rates have fallen dramatically, so we could see a pivot or shift in this area.
Fixed rates across the country have also seen a change.
“According to Freddie Mac’s weekly primary mortgage market survey, the average 30-year fixed mortgage rate nationwide fell to 6.95% for the week ending December 14, 2023, the lowest rate low since August 10, 2023. On the 26th, the rate had increased to 7.79%; therefore, this 0.84% decline in the rate over the past seven weeks has supported an immediate resumption of additional buyers entering the market,” Mr. Shuffield said.
“This significant decrease in the 30-year annual mortgage rate,” he said, “is equivalent to an 8% decrease in the overall principal and interest portion of a buyer’s monthly home payment – generating annual savings of just under $7,000 for a $7,000 borrower. $1 million at today’s rate, compared to the higher rate just seven weeks ago.
Coconut Grove appeals to many buyers because it is home to top schools and unique culinary experiences; this contributes to the growth and attractiveness of the community.
“There’s just a lot to offer (in Coconut Grove),” Mr. Villanueva said. “It’s a very walkable community. It offers a lifestyle that many seek when it comes to living, working and playing, and it’s all concentrated within a relatively reasonable radius. That makes it very attractive for people to make Coconut Grove their home…a great community, prices are strong, demand is strong, fundamentals are strong. The education and influence that is attracted to it is also very strong… It’s just a really strong market and it’s gotten stronger over the last five years.
Coconut Grove has also attracted outsiders who join the residential community.
“We’re definitely seeing a significant amount of migration from the Northeast as well as the Midwest, coming into Coconut Grove,” Mr. Villanueva said. “Recently, we’ve also seen some migration from California… as well as from a foreign national perspective, and largely from Europe.
We see Germans, French, Italians… who love the Grove lifestyle, and they have made some purchases there.
Other industry professionals have also noticed that Coconut Grove is attracting more people.
“Everyone wants to live there and there is a lack of options available,” Mr Siddons said. “But New Yorkers, especially those who come from Greenwich or Westchester or certain sub-areas of New York, love it because it … gives a real organic feel. Sometimes I’m told it’s a bit reminiscent of (Greenwich) Village. Very laid back and such cafes, restaurants. Very cool, but very little product. Because once discovered, no one wants to leave.”
However, Coconut Grove was not always what it is today. Over the years, it has evolved from a laid-back destination to a more sophisticated place.
“It’s unique,” Mr. Villanueva said. “Coconut Grove used to be a completely bohemian artistic neighborhood, now it’s become a pretty luxury neighborhood. Because of all the condo developments and new restaurants, the CocoWalk redevelopment, the waterfront redevelopment… it’s become a very desirable waterfront neighborhood, not that it wasn’t before, but it was different. You used to go to Scotty’s Landing and sit in plastic chairs and have fish dip and a mahi sandwich. From now on, you will have a more gastronomic experience with the new restaurants… like Key Club and PLANTA (Queen).
The city continues to grow and attract more residential buyers. However, its geographic size continues to limit availability.
“It’s the first choice for many families when they come to Miami,” Mr. Siddons said. “There is no other neighborhood like it. It’s really not reproducible…. With many people moving there, when they discover it, it is rightly a first choice for many buyers, but it is a very small geographic area.
