The Miami real estate market continues to percolate with those looking to enjoy luxury real estate in an area that has enviable year-round weather seeing their options increase with each new building that goes up.
That’s a far cry from five years ago, when the market bottomed out after the economic collapse of 2008. Real estate watchers had been dealing with a slide in real estate since 2006, but the crash landing left plenty of damage that would need an additional few years before it began to pick up.
Popularity with Foreign Investors
Many investors in the condo market in Miami are coming from Latin and South America, giving them a relatively short jaunt to the United States. However, European and Chinese investors also have indicated their interest.
In the latter case, the enthusiasm stems from the fact that China doesn’t allow its citizens to own multiple homes. In Miami, the average purchase price of a home by Chinese investors has been just under $600,000.
A good portion of the reason that the Chinese bought more than $22 billion in American real estate is that Miami’s prices for luxury real estate are decidedly less than other hot areas like New York or Los Angeles.
For other countries, the improved U.S. dollar is seen as much more stable than the economies of the investors’ home countries.
Condos are Hot
This segment of the market has seen double-digit growth for each of the last three years. A good portion of those condos are considered luxury real estate, even if many of those same investors don’t use their purchase as a primary home.
There seems little risk to a number of the luxury real estate projects in Miami, since most are being financed by the buyer. The fact that many of these buyers are paying in cash is another indication of how eager they are to move into their real estate.
The high rises that are being built or being converted from their previous use are seeing remarkable prices for the penthouses. A number are in the $50 million range, and with the eagerness of others to get in on the fun, more are on target for construction.
There’s always the risk for another bust, but right now, Miami and real estate are going together like sun and fun.
Gennady Barsky is the CFO of JetSmarter and Real Estate Mogul, and also a lover of all things automobile.