The real estate burst and the recession of South Florida are long gone. The area has been going well lately and its situation is promising for 2015 as it is on track to strengthen its employment base along with having a fast growth in construction jobs. On top of that, the business climate is good, interest rates are low and so are oil prices. To that extent, many industries such as tourism, retail, banking services and construction should do well, all resulting in a more prosperous real estate market.
The question though is whether or not such enthusiasm could lead to overbuilding and doing insane prices, thus leading to another collapse.
Economists attempt to reassure us saying that even if history is a good indicator, real estate meltdowns do not pop up as often as recessions and the future crises should not do as much damage as the previous ones. Indeed, the Miami economy has consolidated itself to a point where it has become more durable.
What is going on in the construction sector? One can definitely observe some dynamism in the high rise residential with construction costs going up to $50 million. Indeed, projects such as the Porsche Design Tower with its inside car elevators and 1,000-foot observation tower require a lot of manpower! The fact that the employment in the construction sector is growing faster than in any other is a good sign that the real estate market and especially the condo market is buzzing.
Why so? A great deal of the reasons depend on international trade. Foreign investors now give a lot of cash, which has not been very customary from local buyers. Cash acts as a better guarantee that deals will go through and developers tend to trust buyers doing ample presales more.
Countries such as Brazil, Argentina, Mexico, Chile, Ecuador and Colombia have been experiencing economic slowdowns, as well as Japan, China and the Eurozone. It has led buyers from these countries to purchase in the USA instead, for safer investment purposes. As an overall popular destination, Miami has benefited from the good and the bad happening abroad, thus attracting international capital flows. The strengthening of the dollar actually has not had that much of an impact. Let’s keep on touching wood!
Finally, employment in business, financial and retail services will grow by an average 3% in 2015 because Miami hosts a real hub for companies interacting with Latin American businesses. With more high wage-earning inhabitants, Miami real estate market is getting more potential buyers. Added up to the drop in gasoline prices, many customers are now left in 2015 with more money to spend and possibly to buy a condo!
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