Editor’s note: The Real Deal will provide a monthly update on the Miami real estate market due to reader interest.
Inventory rises in Miami region while sales increase
The Miami metro region’s housing market remains stronger than the Florida market overall, but signs of rising inventory mean changes on the horizon.
Single-family home sales in the Miami metro area increased 21 percent in March, according to the Florida Association of Realtors, reaching a total of 942 home sales, compared with 777 during the same month the year before. The median sales price, too, rose in March — 19 percent, to $383,100.
All is not bright, though. “Our inventory is up,” said Norka Diaz, president of the Realtor Association of Miami-Dade County. The number of homes for sale in the county has almost tripled in just the past nine months, the Miami Herald reported in late April.
In Palm Beach County, more than 29,000 single-family houses, condos, and townhouses were for sale in late April, according to the regional multiple listing service. The South Florida Sun-Sentinel called that a 124 percent increase over April 2005.
The inventory build-up may be showing itself most acutely in the sluggish sales of condos. Sales of existing condos fell throughout South Florida in March, according to the state Realtors association. Sales fell, for instance, 24 percent in Palm Beach County and 27 percent in Broward County.
Rising rents, shrinking vacancy expected in Miami office market
While the Miami residential market cools, the city’s office market remains hot. The Miami office vacancy rate, in fact, should dip below 11 percent by the end of 2006, according to a forecast by brokerage Marcus & Millichap. Since 2003, the vacancy rate has declined steadily, from highs of around 15 percent four years ago. This fierce competition for space is reflected in the rents being asked of Miami office tenants. Asking rents are expected to rise 5 percent before year’s end to an average of $25.51 a square foot. Median sales prices for office property in Miami are expected to rise 22 percent in 2006 to $183 a square foot.
Report: Florida fine fare for small businesses
A new report should be good news for chain retailers and small businesses wanting to open in South Florida. In April, Florida overall was ranked by the International Franchise Association as the sixth most desirable location nationwide to start a small business. South Florida, with its residential development and growing population, presents a particularly fertile ground for these businesses — and restaurant chains have taken notice. Outsiders like Houlihan’s, Mr. Goodcents Subs & Pastas, and Five Guys Famous Burgers and Fries are moving into the region, the South Florida Business Journal reported, while homegrown companies like Salad Creations and R.J. Gators Florida Seafood Grill and Bar are expanding there.
Cancelled home sales increase statewide
Cancelled home sales have jumped recently in Florida, according to Cendant Corporation, the corporate parent of brokerages such as Century 21 and Coldwell Banker. Cendant’s offices across the state saw a 30 percent rise in cancelled sales, Inman News reported. The cancellations are the symptom of a slowing housing market statewide. Sales of single-family homes statewide declined 22 percent in March, compared to March 2005, according to the Florida Association of Realtors. The sales drop doesn’t mean prices have dropped, too. The Realtors association pegged the statewide median sales price at $248,200, a 17 percent increase over March 2005.
Boom or not, development sprouting along Biscayne corridor
The Miami region’s housing inventory may be rising and Florida’s overall housing market cooling, but residential development remains robust along the Biscayne Boulevardécorridor. As many as 15 projects are under construction in the corridor, according to the Miami Downtown Development Authority and the City of Miami. That’s enough to house as many as 30,000 residents, all in a 1-mile area, Miami Today reported. The fresh projects include the three largest: MarinaBlue at 888 Biscayne Boulevard and 900 Biscayne at 900 Biscayne Boulevard, each with 516 units, and the 1800 Club at 1800 N. Bayshore Drive with 468 residential units.
Water shortage may stymie South Florida development
Developments, developments everywhere, and each needs water to drink. South Florida has a shortage of natural sources of drinking water, and may have to halt development because of it. The state, in fact, has declared that major real estate projects in the tri-county area must be slowed until alternative sources of water can be developed, the South Florida Business Journal reported. Miami-Dade County alone has been told to reject 17 large-scale projects because of a scarcity of drinking water. Gov. Jeb Bush said recently that South Florida must confront the problem if it hopes to develop further, according to the Business Journal. “It makes no sense,” Bush said, “to develop west and west and west without the adequate development of infrastructure and water supply.”