Wealthy New Yorkers and Californians might be fleeing to Miami to find lower taxes - but there still aren't enough buyers to fill up Miami's condo glut

Wealthy New Yorkers and Californians might be fleeing to Miami to find lower taxes - but there still aren't enough buyers to fill up Miami's condo glut

miami millionaires row

Katie Warren/Business Insider

Wealthy South Americans aren't buying Miami real-estate like they used to.


For the past couple of years, tech CEOs and hedge-fund managers from New York, Silicon Valley, and other high-tax areas have been relocating to Miami and other parts of South Florida.

A top Miami real-estate broker, Dora Puig, recently told Business Insider that she jokingly refers to this demographic as "tax refugees": people looking to establish residency in Florida, a no-income-tax state, after the tax reform that went into effect in January 2018.

"You tax people so hard in their state when they're top of the market and they make that much money, they're going to pick up and move," Puig said. "It's that simple."

Despite the influx of high-earning out-of-staters, Miami still has a surplus of luxury condos and not enough buyers, The Wall Street Journal reported.


The South Florida city used to be a magnet for affluent foreign buyers from countries like Brazil, Venezuela, and Argentina, but as these countries face tough economic times and currencies worth less, Latin American buyers aren't picking up real estate in Miami like they once did, according to The Journal.

Read more: 9 mind-blowing facts about Venezuela's economy

Miami real-estate agent Brett Harris told The Journal that just five years ago, 80% of his clients were international buyers, and today that's fallen to 20%.

"Sellers are hoping wealthy buyers from high-tax states like New York and California will fill the void," Candace Taylor wrote for The Journal.

But so far, these domestic transplants haven't compensated for the loss of international buyers, Taylor reported.


"There's been a lot written about New Yorkers flocking to Miami," real-estate agent Mark Zilbert told The Journal. "They're flocking here and looking, but not necessarily buying anything."

Or instead of condos, they're buying large single-family homes that they find to be of better value than what they can get in New York, according to real-estate appraiser Jonathan Miller.

Buyers in Miami get more bang for their buck

I recently spent three days in Miami, and it was clear that luxury homebuyers get more bang for their buck in Miami than in New York City. Miami homes are larger and often have generous private outdoor space as well as waterfront locations, surrounding greenery, and swimming pools.

Consider the $48 million penthouse that I visited in South Beach, which spans 11,031 square feet across three floors and comes with a 2,000-square-foot terrace and a private pool.

A $58.5 million, 87th-floor condo I recently toured in New York, on the other hand, has a relatively modest 6,234 square feet of living space on just one floor - and not even the top floor. The New York apartment has no private outdoor space either, yet it's more than $10 million pricier than the Miami Beach penthouse.


indian creek mansion miami

Katie Warren/Business Insider

A $24 million mansion in Miami comes with a resort-style swimming pool and cabana.

And when it comes to single-family homes, the differences are just as stark. In Miami, one of the homes I toured was a $24 million mansion on a private island that has just 34 homes and its own police force. The eight-bedroom, 9,709-square-foot mansion sits on 1.2 acres and comes with waterfront views, a resort-style pool, cabana, and boat dock.

In New York City, a townhouse for sale for about the same price has 1,309 square feet less of living space and a backyard that appears to be smaller than the Miami mansion's swimming pool.

While one type of home isn't necessarily better than the other, it's clear that your money will simply buy you more space in Miami.