Miami Real Estate Is On The Up... And Staying There
Speculation over the local real estate market continues, but ever-true to its "Magic City" moniker, it appears that Miami will once again restore its impressive growth levels. Following recent statistics and silver-lined trends, industry experts cite that 2012 may finally mark a hopeful turnaround. This good news is well-received, but is it here to stay? While a cautious outlook is expected, the Miami real estate community is ensuring that key safeguards are in place this time around to support long-term sustainability.
Transactions are more stable now due to stricter lender guidelines. In 2007, it was possible to obtain 100% financing, pull equity from existing mortgages and qualify for loans with no income verification. Today, even strong buyer candidates are pressed to secure 75%. The conditions are even more tedious for condominium projects, for which can require up to a 50% downpayment. Coupled with higher deposits now commanded by developers, as much as 70% spread out over a 24-month period, buyers must be able to part with significant money upfront. However, it filters out volatile prospects who could potentially place future stress on the market.
The Miami Board of Realtors (MBR) reports that foreign nationals are bolstering new market growth, snatching up 65% of inventory. Many of these international buyers, namely Brazilians and Canadians have benefited from their respective strong economies or weakening political structures, making them ready to invest in the US, and especially in Miami. According to the MBR, a significant 90% of these international purchases are in cash, compared to the national average of 29%. This important market adds further stability by reducing the number of new distressed properties, as well as helps boost market values.
Real estate growth is also supported by a now tangible infrastructure. The hype of overhauling run-down districts has finally come into fruition. The Design District continues to bring in upscale retail brands, Downtown will be home to a Whole Foods and potentially a Trader Joe's market, and new high-profile restaurants are adding cache to up-and-coming spots from Brickell to South Beach. As a result, buy-in to these neighborhoods are no longer based on speculation, enabling the new skylines to fill out. The Downtown Development Authority cites that Downtown occupancy is currently 94% compared to 74% just last year, and inventory is dwindling fast. Fortunately, as cited by Condo Vultures, 45 new commercial and residential projects were announced from Miami to Palm Beach between 2011 2012 alone, hinting that this growth and refinement is expected to continue.
While it's unlikely that real estate pricing will return to pre-2008 levels, at least not in the near-future, the market is assuredly on the rise. In this case, slow yet steady wins the race. Responsible transaction processes ensures serious and stable purchases and Miami's continual evolution will uphold its global appeal to buyers wanting to reside and invest.
Miguel and I are excited about the changes we are seeing in our city and as always are here to help you with all of your immediate and future real estate needs.
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