Words: Ashley Rigg
Published: 5th April 2011
*Portal reports 400% price premium for coastal properties
It seems that the cliché that all markets are hyper local has never been more true than in South Florida.
A large property portal based there is reporting enormous price differentials between properties on the coast and comparable units just a few miles inland.
According to Condo Vultures, condo resellers in South Florida are seeking an average of $523,800 for units near the coast, compared to a price of $118,200 for comparable properties in the suburban districts of Miami-Dade, Broward, and Palm Beach counties, which in some cases are just a few miles away.
The price premium for coastal properties is nearly a multiple of four, an incredible figure by any standard.
Second home buyers skewing the market
Peter Zalewski, Principle at Condo Vultures puts the differences down to a combination of a depressed local economy and affluent second home buyers seeking prime coastal real estate.
"The average asking price for a condo resale near the coast is nearly $406,000 more expensive than the cost of a unit in suburbia. South Florida's double-digit unemployment rate - which is higher than the national average - is at the root of the price differential.
"Contributing to the price discrepancy is the fact that condo owners in suburbia are struggling to hold on to their homes while the coastal market has received an infusion of all-cash investors and second-home buyers who are somewhat less vulnerable to the economic downturn."
Unprecedented?
Since the beginning of the crisis, the price differential between the property in the very best locations and the rest has been rising across the globe. However, a 400% price premium seems almost unprecedented.
I would be interested to hear from anyone with a similar experience?
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billionaire’s family home on the southern Spanish coast. It has 180 degree sea views and is one of the only coastal sites in the country with planning permission for a good size development (7000 square metres). If you know anyone who might purchase it, you could earn substantial commission.
Source: Global edge
User Comments
The market is changing Globally; people who leveraged coastal purchases before 'the Crunch' are now off loading properties to anyone with the cash to buy them. The price differential is often much more a symptom of how much further prices have fallen inland. Even in Egypt you can expect to pay double or treble for beachfront property.,
Peter Mitry,
Egypt Real