Developers are reacting to Miami’s shrinking inventory with an increase in new construction. 25 new condominium projects are in the works.

Miami’s shrinking inventory is becoming extreme: out of the 22,000 condos created downtown during the boom years, only about 600 remain unsold, due to a large amount of Latin American investors. Developers are reacting to the shrinking inventory by building more condos.

“Miami was the leading edge of condos four to five years ago,” EWM Realtors broker associate, Christopher Zoller, said. “When the crash came, we thought it was going to take years to sell all of the inventory. It only took a few months.”

In the last two years, 25 new condo projects have been announced and eight are under construction. Currently, the biggest project developers are working on is the $1.05 billion Brickell CityCentre project. It will include 800 condos in two 43-story towers, a hotel, a luxury movie theatre and a wellness center aimed at Latin American tourists. This would mark the first upscale shopping center and office building in the downtown neighborhood since 2007.

“This will be our Rockefeller Center,” Robert Kaplan, a principal with the Miami Beach office of Ackman-Ziff mortgage brokerage, said in an interview with The Herald Tribune.

As the increase of construction helps Miami’s shrinking inventory grow, we can see that the housing market is rebounding across the nation. According to February’s S&P/Case-Shiller index data, national home prices grew 9.3 percent over the same month a year ago, the highest growth rate since May 2006. Miami, by comparison, rose 10.4 percent.

According to local brokerage Condo Vultures, prices in Miami’s condo market increased to $440 a square foot in the last quarter, compared with $400 in the same quarter a year ago. Developers are ready to take advantage of this by building more condos.

“We seem to be on the cusp of another boom,” Peter Zalewski, a principal at Condo Vultures, told The Harold Tribune.. “The question is whether this will be a controlled boom or another out-of-control boom, which is what we’re known for.”

What Will This Mean for Miami?

Zoller believes this trend is going to be continuing in the Miami area for a long time.

“I see it continuing as long as people want to live in Miami,” he said. “It is going to be a continuous cycle of boom and bust, boom and bust, boom and bust. Developers follow each other, so when one wants to build again, they all want to build again.”

Zoller also says all of this new construction is going to make Miami a full-time residential area, which it never was before. With the addition of shops, restaurants and hotels, it’s going to be much more vibrant and full of people.

“I wouldn’t call it a re-vitalization,” he said. “I’d call it a vitalization.”

Keeping all of this in mind, it appears as though Miami’s shrinking inventory will no longer be a problem.