If you live in Miami, you can’t miss the construction cranes digging the foundation for new high-rise condos all over the place. What does it mean? In other words, what are the main trends of the South Florida condo revival?
First of all, the real estate market is still characterized by a huge demand and a low inventory. Consequently new projects are sprouting out like mushrooms and are often quickly sold out. For instance, among the 22,000 units built in Miami Downtown during the real estate boom, only 600 have not yet sold. Just to give you an idea, about 160 new condominiums are projected to be built.
This market lure goes also along with new trends in real estate and architecture: the process of converting building into condo units and the development of mixed-use properties. Indeed, developers as investors currently favor condo conversions. For example, $200 million have recently been invested in the transformation of the Miami Heart Institute into a modern 126-unit condo. The other option for investors is to participate in great mixed-use projects. The upcoming one is the Brickell City Centre with its residential towers, office and retail spaces, hotel, restaurants, luxury shopping mall and condo units.
Then, the latest reports highlight the renewed trust from the banks to the developers. Indeed, financial institutions are taking a more active role in funding the current real estate projects. For example, Wells Fargo extended a $214 million loan to Dezer Development in order to complete a luxury 60-story condo in Sunny Isles Beach.
Finally, the resurgence of South Florida condominium sector is based on the fact that buyers now are partly funding the construction with their down-payments which are on average around 50%. This situation creates a more healthy market in the long term mainly dominated by end-user buyers. On the other hand, the pre-construction financing might encourage developers to reduce their current 50% down-payment norm and reach more buyers.
You should also take a look at this video on the recent debate about Starchitecture in Miami.