Alicia Cervera Lamadrid and Peter Zalewski
South Florida saw continued strength in the residential market in 2011, enough so that a host of developers are planning new condominium and multi-family projects — something that would have been unthinkable a few years ago. As inventory falls, and prices begin to tick up, The Real Deal talked to some of Miami’s real estate experts about what to expect in 2012. Here is what they had to say:
Philippe Lieberman, a partner at Miami law firm Kluger Kaplan Silverman Katzen & Levine
A change in mood is palpable in the Miami real estate market. We are finding that our large real estate clients are turning guardedly optimistic about the direction in which the market is headed and are once again planning large construction projects of residential homes throughout South Florida. Developers are eager to build again.
Alyce Robertson, executive director of the Miami Downtown Development Authority
Downtown Miami’s condo real estate market is bouncing back more rapidly than expected. This turnaround is thanks in large part to foreign buyers who see the value of owning property in our urban core and young renters who have fueled strong demand for downtown living. We expect that this trend will continue in 2012, further positioning downtown as a vibrant, 24-7 center.
Franck Dossa, principal broker at Condhotel
The banks will not start lending. I think they’ll start lending in 2013 or 2014, but not significantly. In 2012, prices will go up, especially in the prime areas like Brickell, Midtown and Miami Beach. The suburbs will continue to suffer, but the foreclosures will not have any effect in the prime areas. International buyers will continue to come to Miami, but less than this year — but we’re going to have more traffic.
Daniel De La Vega, broker/managing partner at One Sotheby’s International Realty
I think prices are going to stay the same, but I think there’s going to be a lot more activity. We had a great second and third quarter of 2011, and I expect that continue the momentum through the season and into the second quarter of 2012.
Peter Zalewski, founder of Condo Vultures
It looks like all the overhang of new condo product from the boom and ultimately the bust should probably be taken down by this time next year. In 2012, you’ll start to see a thawing of financing for existing owners, i.e. the refis, and I think you probably start to see a little bit of loosening up on the individual buyer. There’s just too much action to think that it’s going to slow down from a financing perspective. We’re not back to where we were in 2006, but it will be a noticeable difference from 2008 to 2009. But we’ve still got quite a way to go.
Diane Lieberman, founder and broker at SBI Realty
If we’re talking about the Miami/Miami Beach area, I think that prices are going to start to go back up again. That’s because inventory has dropped so significantly. What’s happening is that at the really good properties, prices are all tightening up. And anybody that’s been sitting around on the sidelines and thinking they’re going to get a steal — there’s not going to be anything left.
Alicia Cervera Lamadrid, chairman of Cervera Real Estate
I think we’re going to continue to see increased activity. I’m expecting that banks will finally start coming into the real estate game, and we’ve already seen them tiptoe in and slowly get more sensitive in their loans to value. I think that’s starting to change, and it will open more of the domestic market, which has been slow entering to the Miami market.
Philip Spiegelman, co-principal at Related ISG
What we see for 2012 is the substantial completion of the sale of the standing inventory that was built during the boom. So we believe that the majority, or a substantial majority, of that inventory will have been absorbed by the end of 2012. We see more development coming in 2012, and we see that adjustment or shift as it starts to create more offers. Latin America will continue to play a significant role, but we believe we will start to see real activity out of New York, the Northeast and Canada. I think it’s a watershed moment in the economy of South Florida and the industry of real estate construction.