HIGHLIGHTS FROM THE OPULENCE MARKET REPORT:
The Real State of Real Estate
By Jill Patterson
Miami isn’t shy. She makes an entrance. Her market trends are no exception. It was nearly eight years ago that the Miami market took its historic dive from record-breaking heights. But no less dramatic has been its bouncy recovery, surpassing the nation’s averages. New banking regulations and 50 percent deposit structures for new projects are safeguarding greater market sustainability for the future, but these safeguards don’t seem to be slowing her down. Miami is back at it, breaking sales records, most noticeably in the luxury market.
The Opulence Market Report examines properties over $500,000 in the most sought after areas of Miami. The resale market saw steady growth in 2014. Below is a table showing statistics for resales in 2014.
Where are the buys? For the most part, Miami’s investors don’t make their money through rental income, but through appreciation. The following graph reveals the rates of appreciation in some of our top buildings from 2013-2014. Keep in mind that none of these numbers accounts for the leverage of a mortgage.
There are currently 162 new residential projects in Miami-Dade County completed, under construction or in pre-construction sales. New deposit structures demand buyers ante up a hefty 50 percent in cash up front. For most projects, that limits developers to the wealthy and uber-wealthy buyer. Developers have gone to great lengths to lure that type of buyer, from hiring, literally, the world’s finest architects and designers to mounting art installations to partnering with high-end restaurants and private clubs to give their project cache. It’s working. The Penthouse at Faena House is rumored to be under contract for a record-breaking $60M.
It is safe to say Miami has finally shed her “Scarface” image, once and for all, and has become the fresh “it” place to be. It is an incredible time to be here, with the city dramatically taking shape before our eyes. Billions are pouring into her urban core, but real estate developers are not the only forces charting her future.
The Knight Foundation is putting millions into cultural and entrepreneurial endeavors. “The goal is to make Miami a place where ideas are built,” said Matt Haggman, the Foundation’s Miami Program Director. The Kaufman Index of Entrepreneurial Activity, published in 2013, ranked Miami No. 1 for the most entrepreneurs creating start-ups, in front of Los Angeles and Houston. In May 2014, The Wall Street Journal headlines cried out, “Would you believe it? Miami has a real tech scene now.” The art fever is expanding out of Wynwood north into Little Haiti and south into the Arts & Entertainment District, Little Havana and Downtown. The Miami restaurant world is ablaze with more restaurants opening in 2015 than the last 4 years combined, according to John Kunkel of 50 Eggs (a full interview with Kunkel appears in our Market Report). Miami’s average daily room rate for hotels has increased 9 percent and cruise passengers have increased 27 percent since 2013. Miami is back on her feet. You might say she has survived her adolescence and is moving into her expansive, formative years.
The Opulence International Realty 2015 Market Report is hot off the press. You can download your copy at www.opulenceinternationalrealty.com. In it, you will find an overview of the market, interviews with interesting residents, and information on the most exciting new developments in our Magic City.
Download the full version at www.oirfl.com/reports
Sources: Miami Convention and Visitor’s Bureau, Cranespotters, SEF Regional MLS.