It is not a secret that the down peak of the Miami Real Estate’s cycle is here. But even if it sounds like bad news, it is not at all!
Miami real estate has been following a sequence since the early industry boom in the 2000. This means that if we have arrived at the bottom line, it will have a fast bounce soon.
The whole industry has followed the same pattern, but the ultra-luxury houses’ had shown the most drastic impact.
To understand what is happening now, it is important to go to the roots of it. Houses are now taking longer and longer to sell, this causes prices to go down, even if the land and construction costs are going up. For example, in Miami Beach a 14,000 sqft mansion listed at 26 million, didn’t sell for over six months. This mainly causes a non-profitable investment, pushing developers to stop investing in new constructions.
Then where is the good news right? Well the encouraging detail here is that if there are fewer construction on the market, meaning less spec homes, buyers will have more urgency to buy them and prices will go up again. And then, guess what? The cycle re-starts! Slowly but surely.
Ultra-luxury vs. Luxury houses
Ultra-Luxury developments have been clearly affected by this rough time, but quite the contrary, “regular” luxury houses have shown a promising growth.
A new market of people wanting to buy a luxury place to live with their family, without having to spend a decent millions on it, has increased exponentially.
What do developers think about this?
There are quite different points of view regarding the slowdown. Some are retiring the market, saying it is not worth it and they are not up to wait. Some others, are staying and investing even more for upcoming times. Lower spec prices haven’t feared some for investing in Miami, expecting better times and knowing they will be greatly benefited.
Just to be clear, BUY IS THE ANSWER! And why? Prices are down and we can see there is a bright future coming.