Market studies predict a 19% bounce in Miami rents because of a new construction boom. Get prepared to pay more than $3,000/month if you want to live in a small-sized average condo 2 bedroom in downtown Miami!
Why so? The reason is simple: there seems to be too much demand caused by a recent population influx towards South Florida and, more specifically, to Miami. As a response, developers deliver smaller apartments of about 900 sqft for 2 bedrooms. While current rates are $2.25/sqft, future projects would be listed on the market at $3.5/sqft, which is a substantial increase! Indeed, the median price to rent a 1,100 sqft unit in downtown Miami currently approximates $2,650. That is good reason to hurry and purchase a condo in Miami. First you’ll stop throwing money out of your window and if you plan to move away you’ll easily rent it out at a great price!
Developer Harvey Hernandez, who is dealing with the construction of 37-story Centro tower and 46-story Brickell House, in downtown Miami and Brickell respectively, is expecting rents in Miami to go up steadily as economy and the real estate market regain strength. That is a sign that the housing market is clearly recovering after 2007’s collapse that emptied downtown Miami’s towers.
What is this forecast based on? Demographic and people’s reluctance to live in the suburbs. Such rent spikes are indeed caused by the fact that demand is promoted beyond supply: whereas the previous real estate boom led to the building of 22,000 units in 84 condo towers, the current cycle plans on generating less units.
Moreover, the targeted audience can supposedly afford this 19% rise in rental prices, according to developers. Miami median household income is said to average $60,000 so a unit charging $3.5/sqft would be aimed at “the professional who wants to be centrally located”, according to Harvey Hernandez. If you want to buy a condo in Miami, this is very good news since the profitability of your investment is rising.
However, income growth in South Florida is slow and white-collar employment remains low.
Let’s see if Miamians are going to afford these higher rents!