By Gustavo Farfan
The Brickell and downtown Miami area are poised to be the center of the Universe in Miami. Almost every day I see a new restaurant opening, and the stores and shopping center will soon follow. Miami already has a great nightlife, fueled by locals and professionals that live, work and play in the area defining the new Miami urbanism.
There is a national trend to leave the suburbs and return to the cities, which is becoming more relevant now, due to the fuel prices and the high cost of commuting. It’s easy to see how the Brickell and downtown areas of the Magic City will finally be the next best area to benefit from a great appreciation in the next real estate cycle.
The downtown and Brickell areas are gold. If these areas were fully developed, then prices would be much higher. The same thing happened in Sunny Isles and in South Beach “South of Fifth” – nobody wanted to live there when there wasn’t enough infrastructure in the area and most people didn’t see the opportunity coming. And it’s infrastructure that makes real estate prices go up.
Right now, Miami real estate is experiencing a total buyers market. This simply means if your client is a buyer and has cash, then he/she can get the best deals in town right now.
In the residential end, let your clients know that the current amazing deals lie in the “defaults.” The most profitable type of defaults occur when buyers are unable to follow through with their previous commitments to close on a ready-to-occupy unit. This commonly happens in brand new buildings. The big advantage for the new buyer is that since there is an excess inventory of properties in the market, some developers are selling these default properties at the original 2004-2005 contract prices, sometimes with an additional discount or developer credit.
The next set of opportunities can be found in the owner-motivated arena. These types of properties were priced right before the market correction, and they had continued to be available in the market mostly due to the resistance of their owners to lower their prices to today’s standards. It has come to a point where many of these property owners have experienced either financial difficulty, market panic or they also want to benefit from the buyer’s market and trade up to a better, more expensive property. Whichever the case is, the new priced-to-sell inventories have been presented as a great opportunity to acquire prime Miami real estate in great locations at corrected prices. Motivated sellers are offering great buyer incentives, such as free mortgage for the first two years, owner financing, boats or cars included with the property. Today’s market is all about opportunities.
So, is it better to buy now or to wait a little longer?
I hear some people say, “In six months the prices will be lower.” Let’s take the BlackBerry for example, should you buy a BlackBerry now or wait until the prices go down a few years from now? The answer is if you buy it now, you will start reaping the benefits of it today. In real estate, opportunities come and go but don’t expect to find the same opportunity again.
Sometimes speculation leads to a better profit margin, but speculation is also a risky business. Remember that people make the market, and when everybody starts buying at the same time, the market will automatically turn into an upswing cycle and the best opportunities and incentives could disappear. Real estate is all about location, and right now your clients can be the first to select the best property in the best locations.
Gustavo Farfan is a Miami real estate specialist with Marka-Tech Associates. He can be reached at [email protected] or at 786.200.8700.