MIAMI-Despite the global economic volatility, Downtown Miami continues to appeal to investors. So says a new study by the Miami Downtown Development Authority.

Conducted in the second quarter of 2011, the report reveals that sales activity is stabilizing and prices are rising as condominium supply diminishes following Miami’s most recent construction boom. Of the more than 22,000 condominium units initially built since 2003, only 4,200 units remain unsold, and year-over-year pricing has risen 5% as demand outpaces supply.

“The market continues to show strength,” Leo Zabezhinsky, manager of Business Development & Real Estate for the Miami DDA, tells GlobeSt.com. “This notion that there were going to be buildings that sat vacant for 10 years never materialized. All of this positive news is leading some major REITs to consider new development projects.”

Indeed, foreign developers like Genting Malaysia, Swire Properties, and Espacio USA are investing billions in Downtown Miami. There are plans for large-scale, mixed-use development projects that will bring entertainment, hotel, retail and residential component to the urban core.

The report also finds that Downtown Miami’s rental market remains among the nation’s most active, a reflection of the heightened demand for urban living. Year-over-year, leasing activity rose 11% in the second quarter of 2011 and average pricing for rentals was 7% higher than the year prior.

“The downtown Miami market is outpacing even the most optimistic projections,” Alyce Robertson, executive director of the Miami DDA, said in a statement. “The fact that it is doing so, despite economic volatility, points to the growing appeal of urban living.”

Downtown Miami is currently home to more than 70,000 residents, up more than 80% from 10 years ago. The population is expected to grow to 85,000 by 2014 as the remainder of the new housing inventory is absorbed. According to the report, assuming continuation of sales pace, the remaining unsold inventory could be sold-out in 32 months.

“Downtown Miami continues to attract investors thanks to the quality and affordability of the assets in our market,” City of Miami commissioner Marc D. Sarnoff, chairman of the Miami DDA, said in a statement. “As a result of the investments made here, and growing appeal for the area among new residents, a wonderful community has formed and a world-class city is emerging.”