The city of Miami is a diverse, and thriving metropolitan area in the heart of Miami-Dade County. The city is a major tourism, business and recreational destination.
Although the city, and the state of Florida's real estate markets as a whole, is experiencing major slowdown as a result of the country's mortgage and credit market slump, many still have high hopes that the area’s property markets will rebound this year, despite the soaring amounts of foreclosures and large housing inventories.
Buyers And Sellers Are Still Faced With Uncertainties
According to a Miami-Dade housing and economics analyst, both home buyers and sellers are facing a lot ofreservations in determining the appropriate market price for a multifamily homes, and the biggest concern among both sellers and buyers is that no one wants to pay or sell at a bad price, as many are still searching for the right market.
The problem, according to housing market observers, is that conversions and the flood of new homes could turn the rental market upside down this year. Rising competition from unsold and vacant condominiums and single-family homes as well, may have the potential to perpetuate a "shadow market" of inventories, and this may increase vacancy rates in the short term and lead to a flattening of lease rates.
Where Most Of The Troubled Properties Are Located
According to a report by Condo Vultures, a local housing industry analyst, Miami's downtown district is home to around 30 percent of the distressed, or troubled properties in South Florida,.
The report refers to distressed properties as those that are in the process of foreclosure, and allowed by the bank to be sold for a lower price than that of the amount owed by the borrower/owner, or owned by banks after failing to sell to investors at court-ordered foreclosure auctions. The city’s coastal districts of Brickell Avenue, downtown, the Biscayne Boulevard corridor and the surrounding areas are home to 293 troubled properties, and these include townhomes, condos and single-family homes.
Why Demand For Rental Units Is Still High
According to economists and local property analysts, the demand for rental units in this area is still high, because of job and population growth. South Florida is expected to add 106,000 residents this year, with Palm Beach getting the largest influx at nearly 40,000. The tri-county area is also expected to generate an estimated 35,000 new jobs, with Miami-Dade and Broward counties vying for the most number of new jobs created.
For this year, only 2,000 new apartment units will be added to the South Florida housing market, as compared with the 60,000 that were taken out of the rental pool through conversions last year. The total number of rental units in the shadow and traditional rental markets are still considerably less than South Florida's rentals four years ago.
Despite these gloomy and sorry housing market figures, realtors are still standing firm and are hopeful. Property values have risen, foreclosures are up, and many homeowners are in distress. Home prices may cool off for some time most say, but are likely to either rise or go back to the norm in the long term.
The good thing is that many property buyers will come from Latin America, investing in second homes and not speculating, as well as wealthy European buyers who are looking for respite from their harsh climates back home. The incoming wave of newly-retiring baby boomers should also help in lifting up the market, and in restoring confidence in a battered, but still standing housing sector.
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