Lately we have been pleased to see that prices in the real estate market have been increasing. The market in Miami area in particular is doing great. But if prices are going up that way it’s also because they have been boosted by an inventory which is getting tighter and tighter.
The question is why the inventory is so low right now?
What’s happening is very simple. While seeing prices rising sellers are waiting to sell. They are just being rational in trying to find the perfect moment to sell. Meaning when the prices are the highest! So basically we are just experiencing an imbalanced law of supply and demand. It’s a vicious circle where buyers want to invest now that the prices are not that high and sellers want to wait for them to go higher. The offer doesn’t correspond to the demand, that’s it!
The issue is that even if prices are recovering we will need to wait, in some areas, until 2017 to reach the levels of 2006. As a consequence, we have to be patient until then to have a “decent” inventory again.
The fact is that we really need a larger inventory right now: in average 2500 units are sold every 30 days! Buyers are literally fighting over the few condos which are available. And if we really need new condos in the market it’s also because we are short on affordable condos for investors who are willing to spend around $150,000. Concretely that low inventory leads us to a loss of potential clients.
But good news is that while waiting for sellers we can still rely on fabulous preconstruction projects as the One Ocean Drive or the Peloro on the Bay, which are providing us brand new units!