Miami: Buyers Abroad Flock to Condos
South Florida real estate developers and brokers are in the middle of a condo-buying frenzy. Throw in the state's high property appreciation rates, growing interest from foreign investors, and burgeoning population, and you end up with a real estate hotbed.
In Miami, where home values increased 20 percent last year, according to Florida Association of REALTORS® figures, condos are coming out of the ground at an unprecedented rate. Roughly 70,000 condo units are currently planned, under construction, or already for sale in the city.
Developers have jumped into the market feet first with new condo developments like Mary Brickell Village, the Avenue, the Plaza, and Neo Lofts. Other new projects include Continuum North Tower and Apogee, both in Miami's South Pointe beachfront region. Prices on such units run the gamut from $200,000 for basic, two-bedroom/two-bath units, up to multimillions for penthouses.
"There's very strong demand coming from the baby boomer generation, which is really driving our market right now," says Ralph DeMartino, president of Miami's Ocean International Realty, which has two offices and 15 sales associates. "Even the higher-priced condos are selling well, while the mid-priced ones (at $500,000 to $1.5 million) are becoming harder and harder to come by."
DeMartino, a board member of the REALTOR® Association of Greater Miami and the Beaches, says buyers come to Miami from up and down the Eastern Seaboard and from Latin American and European countries. "With the strength of the euro, the buyers come on strong," DeMartino says. "Their friends see that they're buying a place in Miami's beach area, and they want a piece of it, too."
Existing-home sales also are holding their own in the Miami market, where FAR reported a 2 percent increase in the total number of homes sold in June compared to the same period last year. The area's median sales price rose 27 percent to $363,100 in June, up from $285,900 last June. Where real estate practitioners are facing challenges is in their struggle to find listing inventory.
"There's not enough supply, and there is a big demand," says Jay Chernoff, chairman of the REALTOR® Association of Greater Miami and the Beaches and a district sales manager with Keyes Co., REALTORS®, in Aventura. "Homes sell quickly and usually receive multiple offers."
The area's economy also is showing strength. With a population of 362,470 (according to the Census 2000), Miami-Dade County is the most populous county in the state, with top employers including Publix Super Markets Inc. (with 25,500 employees), Tenet Healthcare Corp. (11,330), Wal-Mart Stores (10,390), HCA East Florida Division (10,000), and University of Miami (9,410).
The region's unemployment rate has dropped since 2004, according to the U.S. Bureau of Labor Statistics, which reported a May rate of 4.1 percent, compared to 4.8 percent during the same month last year. Statewide unemployment in May was 4.0 percent.
Chernoff expects the market frenzy to continue throughout the rest of the year and likely into 2006. However, he believes that talk of the difficulty of finding affordable properties may eventually have an effect on the market.
"All of the buyers are a little worried about putting out $1 million-plus for these properties right now," says Chernoff. "They're not holding back at this point, but they are a bit more apprehensive about moving forward."
-By Bridget McCrea for REALTOR Magazine Online
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