The real estate sector in Miami learned the hard lessons of the 2008 crisis and a decade later, with a more solid base and structure, it has reached stability in a scenario without signs of a “bubble”, according to its connoisseurs.
Although Miami was one of the cities most affected by a crisis originated in mortgages, it was also one of the first to leave. “In 2011 we started building again,” says Alicia Cervera, director of the real estate agency Cervera Real Estate.
What followed from 2012 was a “boom” that is now coming to an end, only this time there is no collapse in sight, says a recent study by the Downtown Development Authority (Miami) or DDA.
Now real estate developers are reluctant to fall in excess supply and also in excess of funding, which contrasts sharply with what happened in the recession.
“The change of cycle (one up is followed by one down) has been completely different from what it was in the past, we have reached a point of equilibrium, it has stopped building and sales continue, although the level is minor, “says developer Jorge Pérez, president and chief executive of the company The Related Group.
The DDA study encompasses not only the Downtown proper, but an area further north and known for its museums and entertainment centers and the Brickell neighborhood to the south.
In the area, whose population has increased almost 40% since 2010, reaching 92,235 inhabitants, what is built are mainly residential buildings, the so-called condominiums, and there are currently fewer projects under construction than a year ago.
Of all the condominium units currently under construction, 70% is pre-sold and of those already completed, more than 80% has already been delivered to buyers, says the report by Integra Realty Resources.
A very significant fact is that in the last eight months a single new condominium project has not started in the area.
The units that were under construction after July 1 were 3,849, while at the end of 2017 they were 5,000, and it is estimated that by the end of 2018 there will be less than 2,500 units yet to be completed.
The period 2012-2019 will end with less than 12,000 units of condominiums built in the downtown area, while in the period 2003-2010 they were more than 23,000.
As the units under construction of the cycle that culminates prices tend to return to normal, the study says.
In fact, they have fallen as a result of an increase in the supply of units whose owners want to resell them, the report says.
In the first half of 2018 prices fell by around 3%, going from $ 405 to $ 392 per square foot (each square foot is 0.09 square meters) in the area.
The market has matured, says Cervera, who stresses that the model is now much more conservative and that the most important change after the 2008 crisis was that the buyer must deliver 50% of the price at the time of purchase.
Another study, this one from the LendingTree company, has just placed Miami in second place in a classification of cities with the highest percentage of homes free of mortgage payments. 52% do not have that burden and only Detroit has a higher percentage than Miami.
Cervera, of Cuban origin, points out that Miami has become “a great city”, with the peculiarity of being at the same time a beach.
“It’s like a Saint Tropez seven minutes from Paris,” stresses the directive of Cervera Real Estate, which highlights the growing interest by both foreigners and people from other parts of the US. to acquire real estate in the center of the city, which has become “a much more interesting place”.
Jorge Perez stresses that the devaluation of Latin American currencies and political problems in those countries has meant that today buyers of condominiums in Miami are no longer, as they were before, Latin Americans by 90%, today the profile is more plural.
According to the DDA study, among the residents of the center, the age group that has grown the most (86%) is that of people between 25 and 44 years old, which is 41,437.
But not only the population increases. Jobs grew by 17% from 2010 to 2015.
Cervera warns that by becoming a big city, Miami has become more expensive and living in the center is not available to anyone.
It is “a deception to think that there will be accessible housing in downtown Miami,” he says, and warns that the solution is to build “decent and accessible” housing in other areas and improve public transportation so that there is “an efficient and comfortable way “to get to the heart of the city.