Miami’s real estate market flattening, in flux: Bisnow conference

Miami /
Jan.January 14, 2016 02:15 PM

Miami’s real estate market is now flattening, as foreign currency devaluations put a damper on spending, industry experts told attendees during a Bisnow conference on Thursday morning at the Four Seasons Hotel Miami.

The correction means many projects planned for 2016 will not be built, which will lead to lower construction costs, said Kevin Maloney, CEO of Property Markets Group.

“It’s good news because we have had a bit of overbuilding and a bit of overspending in the marketplace,” said Maloney, a panelist at the event, “South Florida’s 2016 Forecast.”

The Miami market is highly dependent on foreign buyers — who make up about 80 percent of high-end condo purchases and declining foreign currencies have had the “largest dampening effect” on the real estate market, said Related Group Chairman Jorge Perez, the event’s keynote speaker.

In the last two years, for example, the price of a condo for Brazilian buyers has essentially doubled, he said, without any change in price. “That has been a major factor in acquisition,” Perez said.

At the same time, economic uncertainty in other countries has helped propel Miami’s real estate, which remains a safe haven for investment. Miami is also comparatively less expensive than other major cities worldwide, Perez said.

Still, a key issue remains for Miami’s future: “How do we get this market to be more local?” he said.

Among Miami’s most up-and-coming neighborhoods, panelists cited Little River, Allapattah and Wynwood. “We like Wynwood as an area where locals can buy,” Perez said. “We need to create products that are affordable with the local market,” priced between $200,000 and $400,000, he said.

With rising traffic and congestion, people want places where they can live and work — without needing a car, the panelists agreed. 

In Miami, “just like in New York, all of the urban neighborhoods will be filled in,” said panelist Tony Cho, founder and CEO of Metro 1.

Meanwhile, commercial real estate prices are rising quickly. “There’s a lot of money chasing limited good property and prices are high,” said panelist Jonathan Fryd, CEO of Fryd Properties. In fact, he said he is already priced out of areas like Allapattah and Little River.

In Wynwood, for example, commercial prices have jumped from $200 a square foot three or four years ago to $1,000 a square foot, Cho said.

Fryd said he worries about displacement. “My concern is not what is going to be the next neighborhood, but what do we do about all this displacement?” he said.

Connecting neighborhoods is a key step, said Michael Comras, president and CEO of the Comras Company, who is developing District 36 on the edge of the Design District, across the street from Midtown Miami. There’s no reason, he said, why the Design District, Midtown, Wynwood and the Arts & Entertainment District cannot all be linked. 

“Connecting those districts,” Comras said, “will reduce the need for all this traffic and congestion.”


Related Articles

arrow_forward_ios
Norman Braman and Jorge Perez score court victory against Edgewater Jai Alai fronton
Norman Braman and Jorge Perez score court victory against Edgewater Jai Alai fronton
Norman Braman and Jorge Perez score court victory against Edgewater Jai Alai fronton
Longtime executive Carlos Rosso leaves Related Group (Getty)
Carlos Rosso parts ways with Related Group
Carlos Rosso parts ways with Related Group
Jorge Perez and Apogee Beach
Jorge Pérez lists Apogee Beach penthouse for $7.6M
Jorge Pérez lists Apogee Beach penthouse for $7.6M
Michael Comras and 947 Lincoln Road (Credit: Google Maps)
Lawsuit accuses Michael Comras, Robert Cayre and Harry Adjmi of dodging $300K judgment
Lawsuit accuses Michael Comras, Robert Cayre and Harry Adjmi of dodging $300K judgment
Norman Braman, Jorge Perez and Magic City Jai Alai (Credit: Google Maps, Braman by Nicholas Hunt/Getty Images; jai alai player via Wikimedia Commons)
Norman Braman, Jorge Perez and homeowner groups sue to stop Edgewater jai alai facility
Norman Braman, Jorge Perez and homeowner groups sue to stop Edgewater jai alai facility
From left: Armando Codina, Ana Codina Barlick, Barry Sternicht, Tony Cho and Jorge Perez
South Florida developers and brokers give back during coronavirus
South Florida developers and brokers give back during coronavirus
(Illustration by Pablo Lobato)
Could Bob Zangrillo’s legal troubles imperil Magic City?
Could Bob Zangrillo’s legal troubles imperil Magic City?
Michael Comras and 1500 Washington Avenue (Credit: Google Maps)
Comras looks to sell Five Guys property on Washington Ave
Comras looks to sell Five Guys property on Washington Ave
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...