Amid the slowdown in South Florida's housing boom, developers have been noted to be on a buying binge of many rental apartments, and are turning these into condominiums, and these are done at a much faster pace. Why the recent condo conversion binge?
According to market analysts, Across the Miami-Dade county and extended areas, home builders and developers have sought to take advantage of the strong, and sometimes frenzied demand for condos by converting many apartment units into condos.
Many view that this scenario allows developers to avoid the hassles of actually erecting a new structure, and would also allow prospective buyers to buy and move into a unit faster than the estimated two years it would generally take for a new condo to be built
How Many Apartments Have Been Converted Since?
According to data culled from the localhousing office, just in 2005, around 10,000 or more apartments were converted to condos in Broward County alone.
In Miami-Dade, the condo conversions have quite reduced the rental stock, and many note that it would probably take an additional 3,000 new rental units each year for the next five years to replenish inventory levels to 2002 levels, this acccording to Marcus & Millichap's 2006 National Apartment Report.
However the National Apartment Report has said that it's uncertain if enough individually-owned units are resurfacing on the market as rentals, and whether this would be a major factor in improving the overall rental market.
Apartment Housing Data From Miami Beach
The city of Miami Beach is considered to be one of the best vacation destinations in the United States. Collins Park is one of the city's districts, and is considered to be the most "up and coming" neighborhoods here.
Local media sources here note the completion of the new Sanctuary Spa Resort, an updated public library, and several open projects as evidence for its redevelopment. The district is currently going through a gentrification process, wherein many of the area's old middle-income apartments, largely built in the 1980s, are now being bought by large property developers, and are being be converted into condominiums.
This trend is frequently seen in many of the city's neighborhoods, as the areas that were once inhabited by lower-income families and individuals are being gobbled up by upscale developers and are converted into middle and upper-market housing developments.
A Look At The Apartment Market In Miami-Dade
AT present, property brokers in South Florida agree that there is an apartment shortage in the whole of Miami-Dade County, and they estimate that the area will need an estimated 3,000 to 4, 000 units annually However, there is little chance those units will be built, based on the past four years, as an average of 1,449 units were built per year in Miami-Dade from 1997 to 2000.
The average rental price for a one-bedroom unit in Miami-Dade is $790 per month, and these are expected to rise on average by around 3% annually. Although the luxury rental apartment industry is seeing a boom in Miami-Dade, it is quite harder for average individuals to find a place to live.
According to housing analysts, as of May 2001, there was only a 2% vacancy rate for all kinds of apartments, as compared to May 2000, when the vacancy rate was 2.4%. The county's currently tight middle-income housing market can be attributed to the fact that a large portion of the affordable mid-level housing markets, are being purchased by condo converters.