How is the Miami real estate market ?
Despite all of the catchy headlines about the meltdown of the real estate market in Miami, the luxury condo market has held up quite well during turbulent 2009 and 2010 and is showing clear signs of recovery in 2011 to date. No fewer than 273 units asking $500,000 or more re-sold in the first four months of 2011 alone in Miami Beach, Bal Harbour and Sunny Isles.
If the current pace of sale continues, 2011 will be the best year in terms of number of units sold since 2006. There is still plenty of inventory on the market, and good deals will certainly continue to be available in 2011, but luxury condo prices have probably corrected about as much as they will, and in many buildings, have come off their 2009 lows.
The figure above does not include condos purchased directly from the developers as they are not reported in the Multiple Listing System. This will continue to hold especially true for South of Fifth – the exclusive neighborhood located at the tip of South Beach, which has received a lot of buyer interest in 2009 and 2010, and which, if the current pace of sale continues for the rest of the year, will set set a record for sales volume in 2011.
The reason for that is that supply is relatively constrained – there are 7 high rise luxury condominium buildings – Apogee, the 2 Continuum Towers, Murano at Portofino, Portofino Towers, Murano Grande and Icon South Beach. Because of zoning restrictions, no buildings taller than 75 feet will be built in the area. That means that what is currently built represents the majority of the supply for the future.
Demand, on the other hand, is likely to remain strong – both from US and international buyers. The buyers who purchased apartments in these buildings over the past couple of years are mostly end users who are buying a second (or third or fourth) home, who plan on holding on to and enjoying their apartment for a few years, and who pay cash.
The story is different for single family homes – the sale activity there has been significantly slower, and the inventory is substantial. We expect there will continue to be great opportunities to own a luxury waterfront home for a relative bargain price in 2011 and 2012.
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