Seeking Light for Miami Real Estate’s Future

It has been a tough year for the Miami real estate market so far and the clouds are getting darker, it hasn’t been good to out overall market as of late and been on the down slope most of the year. But still hope is in everyone’s eye as there positive signs for the Miami real estate market as well as the rest of South Florida real estate market. One reason is the increased sales volumes, yes folks you heard it right there are reports that the increase sales volume have progressed real good. Existing home sales volume has been steadily improving since the last couple months of 2007, and that trend should continue with historically low interest rates and lower home prices.

It is reported that right now, around 50% or so off the peak sale volume, which mirrors the last downward real estate cycle that was way back 1986-1991, when we were at 55% off the peak sales volume at its lowest point. So developers reacted more quickly to this current market. This bodes well. The only exception to this may be certain pockets of the condo market, which Dr. Fishkind didn’t get into in much detail. Housing starts have slowed down at a faster during this downward cycle than in the one in 1986-1991. Also Miami-Dade County employment numbers still strong, Locals need a place to live as well and have a big impact on the real estate market, even in second-home-heavy Miami. And the employment growth was still strong in 2007 with 11,500 new jobs created, as compared with 13,200 in 2006. And population grew at a strong 15,000 in 2007.

There are few reports that high energy prices hurting second-homers that would otherwise buy in Florida; we all know that the high energy prices tend to impact a larger percentage of the states east of the Mississippi River. And when their economies are not doing as well, people from those states don’t buy as many second homes here in Miami. This is something to continue to watch as the energy problems play out this year. A side note about the South Florida and Miami rental market, will Miami rent prices decline? Well I believe the answer there is yes but as developers and capable 2004-2006 individual investors refuse to sell at a loss, and as wholesale investors gobble up large numbers of units from banks and developers, they will all rent out their units and wait for the top of the next cycle in a few years.

So, with that being said I believe that the movement of the market will be in good flow. There are other factors to consider but right now, those are the main things that make me decide that the Miami estate market will be in good faith. Let us erase the mentality of believing the hype and eventually getting swallowed by it. At least let’s forge some insights on whether it’ll be healthy for the market to go on in this state. The future looks nice.

Jron Magcale


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