Just a few miles east of Brickell, Key Biscayne’s has remained relatively resilient to the downturn, with particular strength in the rental sector. As in Miami’s condominium market, many affluent South Americans and Europeans have buoyed Key Biscayne by plunking down cash for long-term rentals.
“There’s a high demand for rentals,” said Martine Paulin, a real estate associate with One Sotheby’s International Realty specializing in the Key Biscayne market. “We really have good business, and it’s getting more and more active.”
The rental sector on the island itself is not monolithic, however, with tenants taking everything from one-year leases to brief one-to two-month stays.
“There’s more demand than before,” Paulin said. “The majority is seasonal rentals, with the highest prices, but we also have another season in the summer months, when the South Americans and Europeans have long vacations.”
In the first quarter of 2012, the median rental price of a Key Biscayne condo rose by about 8 percent over the same period last year to $2,850, according to data prepared for The Real Deal by brokerage and consultancy Condo Vultures.
“The renter profile is either the family that is here from abroad and is only going to be here for a couple of years, or it’s the people that want to be on the island, but cannot afford the prices,” said Gilberto Ocampo, a Key Biscayne sales associate with Esslinger Wooten Maxwell.
Key Biscayne, which saw a large amount of residential development in the early 1990s after decades as a low-key beach town has always had very controlled development, according to Peter Zalewski, founder of Condo Vultures.
That control has meant that while many of Key Biscayne’s rental towers are a bit antiquated, demand has remained strong, especially on the rental side.
The average rental price of a Key Biscayne condo also rose slightly, up 30 basis points to $3,081 per unit in the first quarter of 2012 compared to the first quarter of 2011.
“Most people cannot make purchases, so it’s cheaper to rent than for them to buy,” Ocampo said.
Ocampo, who said the last six to seven months have been particularly strong in the rental sector, noted that he has seen increases of as much as 20 percent in rents.
“The prices were somewhat depressed, and lately they have started to increase as inventory has gone down tremendously,” he said.
That jibes with the Condo Vultures data, which shows that the number of units rented dropped in the first quarter of this year to 49 from 58 in the first three months of 2011.
“Key Biscayne is a small town in a big city,” Zalewski said “The supply and demand there are not going to be overwhelmed by the conditions you find other places like downtown Miami or South Beach. So Key Biscayne is almost an oasis.”