Last month on March 19, the Barron's, a reliable business magazine posted an article where the author states that the prices for Miami real estate has fallen more than 50% and are ready to rebound by 2013. Next paragraph shows the data.
At the year end of 2011, the S&P/Case-Shiller National U.S. Home Price Index fell to a record low of 33.8% below the boom peak level, recorded in 2006's second quarter. The descent has been more hideous in such once-manic markets such as Las Vegas, Phoenix and Miami, which, according to the Case-Shiller 20-City Composite Index has fallen 61%, 55% and 51% respectively from their high-water marks.
The author briefly mentioned in the article that in big metropolitan cities like Boston, San Francisco and Miami that the market is separated by the areas. Karl Kaser, a professor emeritus at Wellesley College and one of the progenitors of the Case-Shiller indexes stated:"If you drill down in the numbers by zip code in the Boston area, as I have done, you find that more desirable, affluent neighborhoods like Back Bay and Beacon Hill are doing just fine now—while, say, Fall River is still in the dumps and dragging down the entire Boston Metro area," he asserts.
I want to add more onto that. The market in cities especially like Miami has become local and is getting separated in to hundreds of small markets based not only by zip code as was mentioned in the article, but rather by popularity of group of buyers, the year when it was built, and prestige if you will. The prices for those properties like Turnberry Ocean Colony condo in Sunny Isles, Acqualina in Sunny Isles or Jade Ocean have appreciated at least 40% in the last 2 years and come back to the level of 2007 when the market has peaked.
Last sales in Bal Harbour, one of the most prestigious areas in Miami shows the same. We have less and less inventories available and for new projects developers are charging huge premium. The new pre-constructions in Sunny Isles Beach at such projects as Mansions at Acqualina, Porsche Residences condo in Sunny Isle are starting at $ 1,200.00 per foot or higher and even Chateau Beach, new project in Sunny Isles has started at $ 780-800 per foot.
I know that there is big difference between the asking and selling price, but none of those developers like Trump Group who are developing Mansions at Acqualina and have successfully finished before Luxuria at Boca Raton condo or Dezer group who built Trump Towers or Trump Royale condos will even start a new project unless they are 100% sure that they can succeed.
I strongly believe that the real estate market in Miami has been separated to luxury real estate in such areas as beach or water properties in South Beach, Bal Harbour and Sunny Isles Beach. The remaining market prices are only set for a rebound.
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