MIAMI—With a growing number of luxury condo high-rises going up, is there a market correction on the horizon? Does it depend on whom you ask? Yes and no. Although there are differing opinions, there can only be one reality.

In March, the Miami Downtown Development Authority's (DDA) released its First Quarter Greater Downtown Miami Market Residential Real Estate Market Study conducted by Integra Realty Resources. The report shows the condo market is reaching a point of equilibrium. You might call it a healthy correction as construction, labor and land costs rise even as currency shifts impact investor appetites. 

“All indications point to stabilization of an active real estate market,” says Anthony M. Graziano, principal of IRR. “With 6,000 units under construction and pre-sold over the past three years, we are reaching equilibrium. Fewer buyers, rising construction costs and swelling land prices will see fewer developers come to market. Still, Downtown Miami is seeing strong momentum with rental and sales prices increasing and growing interest from Asian and domestic buyers seeking the lifestyle and affordability Miami offers relative to other major markets.”

Despite the report, Luis Flores, an attorney in Arnstein & Lehr's Miami office, doesn't really expect a dip in the market. He says he doesn't predict a market correction because there will be another confidence boost once the new batch of condominiums receive certificates of occupancy and the contract purchasers of those condominium units close on those units. 

“The influx of new lenders to the market indicates additional projects will be built over the next 24 months. Not too long ago, lenders were reluctant to make large condo construction loans in South Florida,” Flores says.

“While they may feel very comfortable with our market at this moment, their underwriting standards are very strict. For example, they require developers to join forces with a very experienced team of professionals, including architect, general contractor, sales team and legal counsel, to mitigate risks and make sure the project will be successfully completed.”