Most major commercial real estate developers in the US are forecasting that a combination of steady job growth and a slowly dwindling supply of rental housing, will contribute to making the city of Miami one of the strongest condo markets in the country this year.
This forecast is based on a recent report analyzing the US apartment and condo market, wherein 42 metropolitan areas were reviewed based on their vacancy rates, current construction, affordability, job growth and rental trends. The report viewed Miami is one of the strongest condo markets in the nation.
Job Growth, Low Vacancy Rates Contribute To Miami’s Steady Condo Market
A significant part Miami’s steady condo market can be atrributed to the area’s recent trends, which include job growth, low vacancy rates, and a sizable reduction in apartment supply. Property analysts view that alongside San Diego, Miami is the only metropolitan area in the US where the supply of apartments is fast declining.
The fact that a large segment of Miami apartments are being converted into Miami condos faster than new ones are being built., may cause vacancy rates here to become even lower, and may lead to a further increase in demand for condos. Another factor that further strengthens the area’s condo market, is the number of investors that are buying condos, both natural and converted, some of which will end up reappearing back onto the local rental market soon.
Condo Conversions Are Keeping Rentals Reasonable
Commercial property analysts say that the recent trend of condo conversions in Miami, wherein developers upgrade apartments and put them on the market as a condo, is keeping the city’s rental hikes from becoming unreasonable, since many apartment owners here are apprehensive to raise rents on their properties because of the high concentration of condo activity here. Many condo conversion owners fear that a rapid rise in rents will cause many current renters to become condo buyers instead.
This city has long been a favorite vacation or second-home destination for people from the northeastern part of the country, however a mixture of factors like low interest rates, Latin American economic woes, and the dollars’ pitfalls against the euro, have led foreign investors to view this city as an affordable alternative to skyrocketing European real estate.
Commercial property analysts predict that a shortage of available Miami condos could be in the running in the near future. Nevertheless, it is really quite difficult to accurately make a forecast.
The heightened surge in the city’s condominium market has fuelled a boom in newer development projects. Currently, a lot of projects are on the verge of completion, aiming to provide the local market with everything from relatively inexpensive studio-type condo units to exclusive, upscale condos with ocean views and first-class facilities.
Some prospective clients hope that the condo prices will significantly drop when all the projects have finally settled. It is estimated that more than 50,000 condos will be added to local market within the next 10 years. In downtown Miami, a 35 story condominium tower named the Avenue is already ready for occupancy, and will add 570 units to the local housing market.
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