The Possible Recovery in the Miami Beach Housing Market

19
Jun

South Beach condos

                                                                               

Miami real estate began to take a dive in 2007, but the area has become so popular again that it appears to be recovering too quickly. Housing prices peaked in 2006, and current prices are currently higher for condominium homes and single-family dwellings than they were at the peak. What this means is that more Miami Beach condos and single-family homes are being added to the available inventory, and this fact offers an advantage to those who wish to buy property.

 

Miami-Dade County and the marketing literature are illuminating some important trends. First, 600 new South Beach condos that were built before the housing crash remain unsold for a third subsequent quarter. Even so, developers are continuing to build new condominium homes, and 17 new towers are being built at this time at prices as high as $3,000 per square foot in some cases.

 

Rental Properties

Those who study real estate conditions also need to consider rental properties. Investors who wish to rent their properties to others take rental prices into consideration before they determine whether or not a property’s purchase price is advantageous. More people are leasing properties in Biscayne Bay because they can obtain much lower prices than in Miami Beach, so the total number of rental properties in Miami Beach remains high.

 

Typically, fewer transactions are completed in the summertime in Miami Beach, but the above-described conditions may cause a climate where purchase prices for Miami condominium units and single-family houses are going to decrease because of the increased amount of inventory. Illustrating this point is the fact that those currently in the process of purchasing condominium units in Miami Beach are paying less on average than people paid for homes in the same area from January to April of this year.

 

During the first four months of 2013, the average purchase price for Miami condominium homes was equal to $336 per square foot, and this was a 20 percent increase over past purchase prices. In contrast, the average price was only $281 per square foot during the first four months of 2012. However, this was an 11 percent increase over the same period in 2011 when the average price per square foot was $236.

 

If buyers are currently seeking a condominium unit in Miami Beach, they will pay around $490 per square foot. In 2006 at the peak of the housing boom, these same buyers would have paid a price that is 12 percent lower at $437 per square foot. This increase in price caused more homeowners to place their condominium units for sale in Miami Beach. 

 

Those looking for condominium units have approximately 1,400 properties to consider as of May 20 of this year, and only 225 of these properties are expected to sell each month. This means that these properties should last for about six months if purchase prices remain at their current levels.   

 

The same can be said of the single-family home real estate market. In this case, real estate agents have about nine months of inventory to sell to interested buyers. Also, more people are leasing homes, and these prices are increasing as well.

 

The Bright Side

The bright side of this trend is that there is about four months of rental inventory at current 2013 prices. What will remain unknown at the moment is whether or not sellers and landlords will keep their prices at these high levels at a time when inventory is increasing. Furthermore, landlords must concern themselves with the fact that people can seek properties in Downtown Miami, and sellers must be aware that people can purchase Sunny Isles Beach condos for lower prices.

 

 

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