MIAMI—Downtown Miami’s residential real estate market is seeing both international and domestic demand, driving a strong rise in sales prices, property values, and occupancy over the past 12 months. So says new data the Miami Downtown Development Authority (DDA) released on what has become one of the most active residential real estate markets in the Americas.
“Downtown Miami is now a 24-7 urban center recognized internationally for its cultural institutions, quality of life and global businesses,” says Marc Sarnoff, City of Miami District 2 Commissioner and Chairman of the Miami DDA. “The real estate market is reflective of downtown’s status, attracting buyers, tourists, and residents from countries across the globe who have helped usher in the next development cycle.”
Key findings of the Greater Downtown Miami Real Estate Market Annual Summary Report, conducted by Focus Real Estate Advisors, show average unit sales price is skyrocketing and occupancy has surpassed equilibrium. The study also shows inventory has all but disappeared, renters rule and a new construction cycle is well underway.
The average unit sales price in the first quarter of 2013 including existing and new condominiums was up over 21% to $425,498 from the first quarter 2010 average of $351,078. Quarterly price per square foot trends have also increased steadily: Per square foot prices were up 14% on a year-over-year basis from the first quarter of 2012 to the first quarter of 2013.
Meanwhile, more than 97% of the roughly 23,000 condominium units constructed from 2003-2012 are occupied with renters or owners. Less than four years ago these same units stood at just over half full. More than half (56%) of condominium occupants are renters, occupying both investor-owned units and unsold units offered for rent by developers and building owners. According to the Miami DDA, with disposable income and year-round living, renters are building a community presence and serving as a magnet for retail brands.
As of Dec. 31, 2012, 93% of new condominiums in the downtown area had been sold, reducing the unsold inventory to just over 1,500 units. A number of major new projects were announced in 2012 and during the first quarter of 2013, signaling that the next residential construction cycle is underway in Downtown Miami. The active development pipeline includes a total of 5,514 units, with 65% of these already approved and under construction.
The new development underway and in the pipeline, coupled with strong buyer demand and a thriving rental market, is driving up property values in the Greater Downtown Miami district to levels not seen since the last cycle. According to the Miami-Dade Property Tax Appraiser, property in the Miami DDA district has seen an increase of 6.4% year-over-year in assessed value.
“Downtown Miami’s condo boom has been a catalyst for the entire region, putting it back on the map as a thriving real estate market,” says Miami DDA executive director Alyce Robertson. “International buyers snatched up almost all the existing condo product from the last cycle, signaling demand for new product faster than we ever expected.”
Robertson says this growth is fueling Miami’s emergence as a true urban metropolis and global city offering far more than just sand and surf. A slew of new condominiums are expected to break ground in the year ahead with 19 towers in the pipeline, she says.