Here is everything you need to know about Miami’s Real Estate in October 2017:
- Higher Deposit required for Pre-Construction
The days where buyers were required to put 10% deposit for pre-construction projects are now a thing of the past. Developers are asking purchasers to put up to 50% deposit for new units. Financial leverage seems to be the main reason behind it. Developers are limiting their dependence to borrow and raise money to complete the projects. For example, pre-construction at Muse Condominium are asking 30% of the asking price upon contract.
- Slowdown in Pre-Constructions
Last year, 13,467 condos were under construction but this year only 11,860 are being built. Units are starting to be delivered and the inventory is building up. In fact, projects that have already been delivered like the Icon Bay, saw sometimes a drop of value of up to 43% compared to the pre-construction price. The slowdown in construction is also influenced by the stricter financing from the banks. New developers are finding it difficult to secure financing from the institutions.
- Luxury market still strong.
This year, the Miami real estate is recording many expensive successful purchases. A penthouse at Palazzo de Sol sold for $31 million in May and 2 penthouses in Oceana Bal Harbour sold for $25 million each this year. The list does not end. A penthouse at Porsche Design Tower was sold at $25 million as well in March. The number one spot holder for the most expensive condo still belongs to Penthouse B at Faena House that was bought at a staggering $60 million back in 2015.
- Prices are on the downturn
Re-sale prices are slowly making a downward turn. This is due to the fact there are currently many units listed for sale. Buyers, on the other hand, are small in numbers. Current data shows that re-sales prices has dropped from 8% to 4 – 6% over the past several 2 years.
- FinCen is on full swing
Under the new law, all purchases in cash and wire transfers will require disclosure on the identity of the buyers for those who are buying under a LLCs. This move comes as an anti money-laundering program in busy real estate markets such as South Florida and New York City.