It has been forecasted by major real estate developers in the U.S. that Miami will be one of the most stable condo markets in the country over the next couple of years. This forecast has been based on the steady job growth and a gradually dwindling supply of rental properties in the city.
The inherent stability of the Miami condo market is largely influenced by a number of factors which include the aforementioned job growth, along with a significant decline in apartment supply and low vacancy rates. In fact, market analysts view Miami as among a handful of metropolitan areas in the nation where the supply of apartments is rapidly dropping. This trend is likely to carry on as a huge number of Miami apartments are being converted into Miami condos at a pace that is a lot faster than new apartments are being built. Eventually, vacancy rates will hit rock bottom and there would be a greater demand for condos.
According to commercial property analysts, the current trend of condo conversions in Miami is keeping the rental hikes in check as apartment owners are now thinking twice before raising rentals due to the recent boom of condo activity in the city. They are quite apprehensive that a sudden spike in rents may lead to a scenario wherein renters become condo buyers instead.
Another key factor that further stabilizes Miami’s condo market is the number of local and foreign investors that are flocking to the city to buy condos. Miami has long been a top vacation spot and a favorite second-home destination for people from across the country. Moreover, the recent woes of the greenback on the global market has made prime locations such as Miami beach condos an even more enticing option among Europeans who are in the hunt for a place to retire or as a good form of investment. Miami is now viewed by foreign investors as an excellent alternative to the skyrocketing European real estate.
Though the Miami condo market is currently at its strongest, some analysts fear that there could be a shortage of available condos in the near future. On the other hand, the surge in the city's condo market has triggered a boom in new development projects. A large number of these projects are now on the verge of completion, from affordable studio-type condo units to upscale beachfront condos with first-class amenities. Some prospective buyers are hoping that the eventual completion of such projects would lead to a significant drop in condo prices. It has been estimated that at least 50,000 condo units will be added to Miami condo market within the next decade.
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