The mention of Miami brings to mind images of white sandy beaches, luxury rea estate, a vibrant nightlife, and unforgettable vacations. Located in Southern Florida, Miami is a modern and bustling city that offers a lot more than fun. It is a financial and commercial powerhouse. The city is ranked number 7 in the United States in business, arts, and culture. Visitors expect to have a time of their lives, and they end up getting just that. The Miami real estate is robust with great deals awaiting investors in both residential and commercial properties. With an estimated population of 5.5 million, making the city the eighth most populated city in America, Miami has an established but growing housing industry.
State of the Miami Real Estate industry
Players in the Miami property market describe it as a bag of mixed fortunes. Depending on who you ask, the market is either on its way up or in the middle of a meltdown. While some investors are reaping big profits, others are finding it difficult to sell properties that were in huge demand just the other day. A recent report released by renown real estate appraisers, Miller Samuel & Douglas Elliman reveals that the average price of properties in Miami Beach has dropped to around $905, 252. The figure represents a reduction of 7.5% compared to the same time a year ago. The report also revealed that the number of properties sold decreased by 21.1%. The over-supply of luxury condos in the market has contributed to this decline. Experts say that the low demand is a result of the decreased number of foreign buyers that are known to drive Miami property market.
On the other hand, industry players in the high-end market are smiling all the way to the bank with a series of high-profile success stories contradicting general perception that the industry in on a decline. The appetite for unique high-end properties is on the rise, with buyers willing to spend more than market rates to get their hands on their preferred houses.
Miami leads in the sale of million dollar homes
A recent report by Coldwell Banker on the luxury market revealed that Miami was the national leader in sales of homes worth over $10 Million. This story does not surprise market analysts considering the activities that have been witnessed in the market lately.
Luxury properties such as the Ritz-Carlton Residences in Sunny Isles Beach broke ground with an astonishing 65% of the real estate already sold. The 52-story oceanfront property is projected to be complete by 2018. By the look of things, the property should be sold out long before completion. The top floor penthouse is selling for a pricey $16.6 Million. Another pent-house consisting of two units is selling for $21 Million. For the rest of the listings, prices start at $2.5 Million.
These prices are an indicator to the enormous appetite for high-end properties in Miami. Another example is the availability of a newly listed 3-bedroom unit located in St Regis Bal Harbor. The residence with a stunning view of the ocean is up for sale at $8.5 Million. Previously, the condo unit closed at $30,000 per month.
Upcoming Luxury Developments
Miami luxury market shows no signs of slowing down soon. Property Markets Group announced that they had secured financing for their 464-unit tower to be known as the 300 Biscayne. The tower is expected to shake up the Miami housing scene with 60,000 square feet of amenities.
Other upcoming developments include the 53-story M-Tower that features 440 apartments, offices, a pool deck and retail space. The Met 3 Tower opened in downtown Miami with 462 luxury apartment units and 1,442 parking spots.
The recent approval of the Mega Center Brickell’s 148-foot tall mixed-use development is a welcome project. The most striking feature of the property is that it will have an artistic mural around it. The wall will regularly change to showcase creative work of selected artists.
Rents in Miami
While the prices of luxury apartments in the city appreciated, there has been a marginal decline in rental charges. According to a national rent report presented by Zumper National, Miami is the 8th most expensive city in the country along with San Francisco and New York. In Miami, there was a small decrease in median rent charges from $1,900 in April to $1,890 in May 2016.
The same trend occurred in the 2-bedroom units with rents dropping slightly to an average cost of $2,620. It is important to note that although there has been a minimal reduction in rental charges, the average rental price has risen compared to last year.
In comparison with the most expensive cities such as San Fransisco and New York, the rents charged in Miami are considered costly. The wages and incomes in the two cities are much higher than Miami meaning that their residents can afford the rent. The lower salaries in Miami make the city’s properties unaffordable to many locals.
The city has noted the high cost of rent and has taken steps to help low-income families. The city has set up an Affordable Housing Trust Fund to help developers that plan to build housing units for families earning low incomes. The Commission running the City has realized that unless something is done to make housing affordable to all, there will be a shortage of workers. Young professionals will choose to move to other cities where they can afford the rent.
To sum it all up, the Miami luxury real estate industry is looking positive. The entry of severe investors in the luxury property market is good news for the city. There are also some notable projects that are waiting for approval before the developers can commence building.