The past couple of years have been difficult for the state's real estate market-- particularly in South Florida. However, real estate agents now say that Miami's market is finally booming after years of a lull.
Related Group of Florida, Adler Group and Area Property Partners LP, are among builders developing amid a shortage of rental properties as the economy improves. The average rent for a two-bedroom apartment increased 6 percent to $2,568 a month in the third quarter, compared with the year ago period, according to Condo Vultures LLC, a brokerage and consulting firm.
“There’s a boom in Miami that we’ve never seen before,” said Stephen Ross, chairman and founder of New York-based Related Cos. and owner of the Miami Dolphins football team, at the Bloomberg Commercial Real Estate Conference in New York on Nov. 13. “Miami is probably the hottest real estate market in the U.S. from a residential perspective.”
With most of the unsold, unoccupied condo towers that dominated the Miami skyline as recently as two years ago converted to rentals, the number of multifamily developments is soaring, according to Dallas-based Witten Advisors LLC. The research firm forecasts as many as 3,000 rental units per year may be added through 2015 in Miami-Dade County, which includes the metropolitan area and downtown, more than double the average annual totals of the past three years.
"There is a boom in Miami that we have never seen before..."
Experts say this boom can be attributed to a couple of factors. One, the city has been experiencing significant population growth-- especially from abroad. Many pricey condos in Miami, for example, have been snatched up by people from South America. People have also been moving to Miami because it is getting somewhat easier to find work here. Tourism and health care industry in South Florida have been providing a recent influx of jobs.
Two, the prices of units are rising and rental properties have become an enticing market for lenders looking to invest. This has spurred significant development in condo and apartment rentals in Miami, mostly because there is currently a pretty small rental market.
In all, Miami's real estate market is attracting attention from both the financial industry and people looking to rent or buy, which is a big change from what was happening here just a few years ago.
“The biggest difference in Miami to other markets is how far it fell and how quickly it came back, defying all previous predictions,” Timothy Martorella, managing director at locally based Madison Capital Group LLC, tells Bloomberg News.