It’s not the first time we mention how climate weather is affecting Miami’s landscape. In our article “Miami’s great initiatives to combat climate change” we explained how Miami’s local government is developing new ways to reduce the long-term risk of flooding and stabilize the region’s economy. This time I wanted to explore a little deeper one innovative development that is reducing the flooding risk and is creating a cool trend at the same time!
We’ve been writing about how the Tax Cut and Jobs acted signed by Trump in 2017, has made Miami an investment paradise for Tax Refugees (wealthy buyers investing in South Florida looking for a tax break). New York has been one of the best examples of high tax immigration to the sunshine state. As a consequence, Florida is now the 3rd most populous state in the country.
However, this is not the only reason why people are moving to Miami and why the population has almost doubled since 1990. It seems logical for hard-working New Yorkers to think about their retirement and do the math of how long would their money last with the incredibly expensive lifestyle of the Empire State city compared to Miami.
Foreign buyers have been the #1 buyers of South Florida real estate for more than a decade. However, for the past few years, there was a tremendous decrease in Latin American buyer’s activity due to inflation and unstable local governments. However, according to the Profile of International Home Buyers Report of 2018, there was a rose of 23% of foreign purchase activity in 2018 compared to 2017. Out of those foreign buyers, Brazilians are in the top of the list.
For the past 10 years, Miami has been facing a speedy cultural development that hasn’t been fully followed by the rest of the World. That is why people improperly think that Miami is not a “serious business city” where you can actually go other than on vacation.
Miami is not only a “cool” vacationing location anymore. A strong cultural identity has been created and “developed” in the last decade. As a citizen of Miami, I have to say that I’ve noticed the whole path that Miamians have been following for the past decade. When I imagine what is Miami now, I have a large list of characteristics that top my head. Art, sports, entertainment, business, food, transportation, and those are just a few to mention. Nonetheless, that is not everyone’s opinion.
Little have we discussed about to the current Miami condo’s oversupply. There are new constructions in every corner, that have pushed developers to find new ways of differentiating and stepping above their competitors. This new strategy is modifying Miami’s skyline.
Local developers are now outsourcing the exterior design to famous international architects. Buyers have so many options nowadays, that every detail counts when trying to be more appealing to luxury-seekers. From the parking garages and storages till the outer design of the tower, everything counts!
It is not a surprise that the Florida’s real estate market isn’t in its best shape today. The market has been facing different barriers that haven’t allowed it to grow as the some years before. In this week’s article I will explain some of the biggest problems that the industry is trying to bear.
1. Climate Change
We have all heard rumors saying that Miami is going to flood under water in a few years. Unfortunately, we have to say, somehow it is not false.
According to the public records compiled by Cranespotter, Miami’s real estate has suffered of a downshift that is just now starting to recover.
Out of 350 units over the $5 million dollars that are today on the market, only 6 units are sold per month. And out of this closed deals, 96% of them had to decrease their price for closing. However, the average percentage of reduction is only 5% under the listing price. Investors are just trying to get rid of their South Florida real estate assets.
Whoever tells you that the real estate market is like a roller coaster ride, is obviously not referring to Miami! The Miami Association of Realtor and the Multiple Listing Service (MLS) system, had announced the third quarter (Q3) 2018 sales report for Miami’s real-estate. It seems that nothing can stop their winning streak!
For the 27th consecutive quarter, Miami’s houses, condos and single family homes sales surged. Not even Hurricane Irma was able to slowdown the real estate sales growth in Miami.
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.
According to Miami Association of Realtors, the foreign investment in South Florida climbed up to $7.1 billion dollars in 2017. That is a significant increase of approximately 15% compared to 2016 where the number was only $6.2 billion dollars. Unsurprisingly, most of the foreign buyers are coming from South America. In fact, the political and economic crisis in the area are pushing the wealthy to park their money into a safer environment.
