THE CRANES ARE BACK AND THE PRE-CONSTRUCTION MARKET IN MIAMI IS HOT. THE MOST RECENT DATA FOR SEPTEMBER 2014 SHOWS A TOTAL OF 280 TOWERS TO BE DEVELOPED. MIAMI, NICKNAMED THE MAGIC CITY FOR ITS INCREDIBLE GROWTH YEAR AFTER YEAR, IS BACK TO ITS FAMOUS GROWTH.
By Nelson Agelvis
280 towers are coming. That is an incredible growth for a city that was in a real estate rut just a couple of years ago. Of those 280 towers:
- 92 Towers are proposed but not approved yet by their respective cities
- 100 Towers are planned (already approved)
- 70 Towers are under construction
- 18 Towers will be completed in 2014
When all these towers get built there will be between Palm Beach, Broward and Miami- Dade County a total of 38,346 new units (Source: Cranespotters.com)
The majority of the towers being built are in the greater Downtown Miami Area with 64 new towers followed by Hollywood, Hallandale Beach with 21 new towers.
Many of our clients have raise concern that once these towers are completed there will be excessive inventory and that the market will collapse like it did back in 2008.
In our experience we see significant differences this time around. First, the units being built are luxury apartments geared towards end users. Developers have teamed up with international renowned architects, landscapers and interior designers to offer unique amenities and services.
Another important difference is the deposits structure on these projects. Back in 2004- 2006, developers required only a 20% deposit from buyers; in contrast, the majority of the projects today require a 50% deposit. This reflects more stable buyers who have “more skin into the game.”
We have also seen a change in demographics. The excess inventory that we had when the market collapsed in 2008 was quickly absorbed by many South American buyers specifically Brazilians. Today South American buyers still play an important role; however, we have seen a shift towards domestic buyers, particularly from New York. Also, direct flights have been opened to many previously disconnected world cities, bringing in more international buyers; and developers are also targeting Chinese buyers in the near future. We believe that our unique market has been discovered! Miami offers no State Tax, attractive prices well below other high demand markets, unique weather and growing infrastructure. This brings a perfect combination of investment and lifestyle. More wealth is coming to Miami and investors believe that this market will always have an exit strategy.
New generations will always find Miami attractive.
This is the right time to buy; however you should not do it alone. There are many projects to choose from with distinctive characteristics. It is important to be well informed about the area, developer, demographics and neighboring projects being built. A good Real Estate agent should be prepared to offer you expert and unbiased advice and guide you through the process.
That is where realtors such as Reyna and Judith from B&B Realty of Miami, who generously collaborated on this article, come in. When choosing a realtor you must evaluate experience and market knowledge. In the case of B&B, they have 17 years combined experience in residential investment, distressed properties, and property management, and market knowledge in residential Real Estate and Pre-Construction.
Just two years ago, the naysayers said Miami would be last to recover from the housing bubble, if it ever did. They were only thinking domestically, unknowledgeable of Miami’s global appeal, disregarding Latin America’s millions of wealthy citizens and the affluent Russians seeking a getaway from their cold winters. Well, the Sunshine State as a whole and especially Miami, the Cruise Capital of the World, have shown many real estate market experts, that they were not so expert after all. Miami is The Magic City once more.
Reyna B. Behar
B&B Realty of Miami, LLC
B&B Realty of Miami, LLC