After experiencing one of the worst housing market crises, Miami is is in the midst of making a strong comeback. Miami is seeing rapid residential sales fueled by international investors who are buying local real estate with cash.
Foreign buyers are the primary group who are actively purchasing homes and condos at discounted prices in the coastal and desert regions of the US, including South Florida.
Regions like Southern California, Tucson, Miami and Las Vegas are seeing an increase in the number of units sold, said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, part of HomeServices of America.
Whereas these regions of the country have seen recovery, the Midwest has taken an even greater hit as its sales were fueled by the first-time homebuyer tax credit, an expired federal program that stimulated home buying in the US when the program was in effect. “When that money ran out, those sales decreased,” Mr. Shuffield said. “They have not enjoyed the sale increases of the coastal and desert regions.”
Although Florida is the top state for international buyers, this buyer segment is also actively taking advantage of deals throughout the country, according to MiamiTodayNews.com.
“International buyers are attracted to all of these markets because of the location and quality of life,” he said. “Also, there’s a wonderful supply of inventory to choose from.” But as these buyers continue to take advantage of attractive deals, the home inventory is shrinking quickly, Mr. Shuffield said, pushing up prices as demand remains strong.
The reason so many international buyers are investing is due to the exchange rate being seen as a favorable investment, according to MiamiTodayNews.com. “With many of these currencies,” he said, “it’s almost like coming in with a 25% coupon,” compared to a few years ago.
“South Florida is by far exceeding not only the goals for our assets, but also everybody else in the country,” said Peggy Fucci, senior vice president of sales and marketing at ST Residential, which represents a large local portfolio of recently finished condo towers.
“We see the Miami market moving so fast that we’re also looking to make sure pricing is in accordance with demand,” said Ms. Fucci, who also oversees sales in Houston, Phoenix, Las Vegas, Atlanta and parts of California. “Prices are starting to increase based on that demand.”
The last condo boom left the Greater Miami area with 25,000 more condo units, primarily built in Miami’s urban core and in the beaches, but the “absorption has been enormous,” said Maurice “Moe” Veissi, incoming president of the National Association of Realtors.
Nationally, “the home sales market has been stuck in neutral,” Mr. Veissi said. “It hasn’t done anything spectacular since 2009.”
Absorption of more inventory is necessary for prices to begin rising, he noted, adding that a price jump is probably on the horizon for Miami — if sales activity remains strong.
Home sales were up 51% in 2009 compared to 2008, the data show, and
the total increased 26% in 2010. This year, local home sales are expected to grow by another 50% from last year. “I would suspect that in a very short period of time,” Mr. Veissi said, “Miami would have absorbed enough inventory to press those prices up.”