It’s the third quarter of 2017 and Miami real estate continues to attract buyers from all over the world despite the slowdown last year. A strong dollar and weak foreign economies were the biggest factors for 2016’s sales decrease ( down 25% in the first six months). However, this year seems to be a new chapter. Investors and homeowners are slowly gaining confidence. Let’s take a look at some key-points to better the understand the evolution of the Miami real estate industry.
- The Hottest Area
Miami Beach has been at the top of the “hottest” list for the past three consecutive years surpassing Brickell and Coral Gables. Interestingly enough, Miami Beach is also considered as the most overvalued area in the county. Despite this, buyers continue to swarm the city to buy second homes and enjoy its convenient location near the beach. The highest demand for this area are condominiums.
- Which Neighborhood?
Brickell is the best neighborhood for young professionals who are eager to build their careers. With high-rise condos dominating the skyline, it’s no wonder that this place is popular with residents craving for a fast-paced life. Families with children are calling Coral Gables as home. This is due to bigger size lots for single-family homes compared to any other neighborhood. The neighborhood also has the greatest schools. For couples without children as well as for retirees, Miami Beach is their number one spot to live.
- Who is buying?
Miami’s buyers are diversified. In 2017, foreigners represent 29% of buyers, however, this number has significantly decreased since in 2015 it used to be 56%. Most foreign buyers are from Latin American countries such as Venezuela (19%), Brazil (16%) and Colombia (13%). On the other hand, local buyers is a steadily growing group reaching 27% of purchases this year.
Purchasing a property can be either through mortgage, cash or a combination of both. 68% of buyers financed their real estate purchase in cash back in 2015 but this year the numbers have plummeted down to only 20%. This is probably due to the increase of the dollar value compared to other currencies which affects foreign buyers. In 2017, 50% of buyers financed their property purchase.
- The Property Value
The property value in Miami remains a highly debated topic. 36% of industry experts estimate that price of properties will appreciate in the next 12 months by 5% while the others remain conservative by saying that prices will remain either flat or depreciate next year. For example, properties at the Murano at Portofino condo were up 13% from 2016. They also seem to be divided whether the real estate is currently in the middle or the end of the cycle. Either way, Little Havana, Downtown and Brickell seem to be their best bet when advising a client who wants to make a good return on investment five years down the road.
- The Best Option: Buy or Rent?
2017 is the best year to buy a property. There are many properties for sale, buyers have more negotiating power and the market value is considered as reasonable. The price of properties have significantly decreased as sellers become more realistic and eager to sell their property. Moreover, the mortgage rates for buyers is only 3.7% to 4% in a 30 years loan.