Experts say Miami may see mild recession
Despite high confidence among prominent Miami developers that the real estate market is not due for a significant downturn in 2016, some experts are cautioning that sales will continue to dip, which could possibly ignite a mild recession by the end of the year.
“We are going to see prices continue to appreciate through the first half of year, but at a much slower pace,” said Jack McCabe, founder and CEO of McCabe Research and Consulting. “In the last half of the year, we will see prices flatten, increases in inventory and slowing demand from buyers.”
But Ugo Colombo, the CEO of CMC Group, which is building a 64-story condo in Miami’s financial district called Brickell Flatiron, said he believes the slowdown will be manageable for developers. “It is leveling off at a sustainable rate,” Colombo said. “You cannot expect to keep selling 100 units a month. Right now, there is a healthy balance of supply and demand.”
Since mid-2014, the influx of foreign buyers that fueled an unprecedented condo boom after the 2008 recession has tapered off due to foreign currencies losing value against the rising U.S. dollar.
Key Biscayne estate sells for record $47M
The former estate of the Mathesons, one of Key Biscayne’s founding families, sold for $47 million, marking the most expensive sale ever on the island. The 11,600-square-foot mansion at 775 South Mashta Drive was listed for $60 million in 2014. The five-story estate spans 2 acres and includes 2,000 feet of water frontage. According to the listing, the property was the “playground of America’s elite at the turn of the century.” William Matheson, an industrialist, built the original home, known as Mashta House, in 1917. Guests such as the Vanderbilts, Carnegies and Mellons stayed in the Key Biscayne home in the 1920s and ‘30s — arriving by yacht, according to published reports. Mashta House was reportedly demolished in the 1950s. The current six-bedroom, eight-bedroom home was developed on the property in 1991.
Miami Worldcenter scraps mega mall
Miami Worldcenter, a 27-acre mixed-use development in Overtown, northwest of the city’s downtown, has canceled plans for a major mall anchored by Macy’s and Bloomingdale’s. Citing changes in the retail industry and the Miami market, developers Art Falcone and Nitin Motwani will significantly reduce the amount of square footage for shopping and instead build pedestrian-oriented retail along the lines of Miami Beach’s Lincoln Road. The original plans for Bloomingdale’s and Macy’s to anchor the 760,000-square-foot, three-story, enclosed Miami Worldcenter Mall are now scrapped. Current plans are for about 300,000 square feet of retail shops on the street, said Motwani, managing principal of Miami Worldcenter Associates. It is unknown whether the department stores will continue to play a role in the new concept. “We’re working with them to see how they fit in, but they may not,” Motwani said. In addition to retail, the Miami Worldcenter project will include residential towers, a hotel and an exposition center.