The migration of financiers to Miami, driven by factors such as lower taxes and quality of life, has caused a shortage of high-end homes in affluent neighbourhoods. Hedge Fund Citadel's relocation from Chicago to Florida, has played a significant role in this trend. Real estate agents have noted a surge in demand, with many high-value homes being purchased by hedge fund investors, including Citadel employees. This rush to acquire properties has been particularly pronounced in the early spring, timed with school enrolment deadlines. Despite challenges like the construction workforce deficit, Miami's real estate market is experiencing substantial growth, impacting luxury home availability.
The influx of financiers relocating to Miami has led to a scarcity of high-end housing in affluent neighbourhoods, where buyers have acquired multi-million-dollar residences to enjoy convenient commutes, more space, and access to prestigious schools. Real estate professionals have identified one notable contributor to this increased demand: Citadel.
Citadel, the hedge fund and market maker managed by Ken Griffin with assets totalling $59 billion, made headlines in June 2022 when it announced its relocation from Chicago to Florida, citing lower crime rates and more favourable tax conditions in the sunshine state. They've been actively purchasing properties here remarked by Michael Martinez, a real estate agent affiliated with Sotheby's in Miami, who recently facilitated the sale of a $5 million home in Coconut Grove, an upscale suburb, to an employee of Citadel.
The majority of the upscale residences he recently sold were purchased by hedge fund investors, and he estimated that half of them came from Griffin's company. He indicated that the migration of Citadel employees is certainly happening. Agents noted that buyers from Citadel were particularly active during the early spring, racing to acquire properties in time for school enrolment deadlines.
Citadel expressed that Our employees have shown great enthusiasm for our headquarters' relocation to Miami and have embraced the city's vibrant atmosphere and quality of life. As part of its multiyear effort to shift its operations away from Chicago, Citadel has relocated nearly 300 staff members to Miami. One employee mentioned that the relocation benefits provided were "generous" and helped offset the increased cost of living in a city that has experienced significant growth since the pandemic.
In July, the Florida governor Ron DeSantis enacted legislation aimed at addressing undocumented immigration, which includes substantial penalties for employers failing to verify their workers' immigration status. Consequently, this action has led to a deficit in the construction workforce and is anticipated to decelerate the progress of new housing projects.
According to Zillow data, the number of luxury homes priced between $3 million and $7 million in Coral Gables and Coconut Grove has declined by over 50 percent since the beginning of the pandemic. These homes represent 40 percent of all listings.
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