When you look at the overview of pre-construction real estate development in Miami, you’ll observe several things. First, average prices of properties have been on the rise from 2008. The average price per sqft has exceeded $ 305 for the first time in five years. Second, the days a property remains floating on the market has decreased to 58, registering the lowest level since the year 2008. Since the year 2014, the number of sales has skyrocketed, reaching peak levels not witnessed in the past eight years. The influx of apartments has significantly contributed to the number of sales. If you go back to sales at the beginning of 2014, overall sales rose by 3.9% while the inventory of sales registered 13.2% sales growth compared to the previous year. Further, the prices have risen, and this reflects on the subsequent increase in homes available for sale in the market.
Regular sales market share is keeping up with the rising trends, recording rates of 64.9%, the highest in the last four years. In comparison, the volume of short sales and incidents of foreclosure are on the decline.
Of particular note, sales of apartments are up 2% relative to the same period last year. The number of flats for sale depict faster growth (8,846 units for sale). If you carefully consider the apartments factor, you will realize its effect on the declining rate of market absorption. South Beach is of unique interest, reporting average apartments sale price increase of 19.6% ($355,000).
The Miami property market is both diverse and exotic, presenting the following;
- Skyscrapers and Large Buildings
These properties appeal to tenants by having luxurious facilities; pools, gyms, valet services, security, and lobby conveniences. As an investor, you’ll benefit from a large pool of professional tenants with more stable incomes and credentials. The condos also attract large rental fees in the absence of rare exceptions. Also, expect a return on investment of 6-7% before considerations of management fees, and property tax.
- Art Deco Buildings
In South Beach, low-rise buildings built in the ’20s,’ 30s and ’40s, have recently undergone renovation. They feature long-term rentals of one year, with the condos relatively low priced, buyers, get higher returns on investment. Potential gains are very similar to those of skyscrapers, with a slight difference in the rating of tenants and the amount you have to put up when buying.
Real estate properties in Miami are a source of excitement for investors looking to maximize potential return on investments. The industry is showing tremendous growth.