MIAMI—As buildable land becomes scarce and foreign investors continue to move into the single-family segment, there is a dearth of affordably priced single family new construction. Yet while most homebuilders are targeting the investor with luxury construction, Central Communities is bucking this trend by focusing on infill development geared towards the end user.
As a result, Central is growing rapidly at a time when many competitors are retracting. While luxury building has been seen as the way to go this cycle, Central Communities' believes that targeting end users—rather than investors—is more sustainable over the long-term. There has been strong demand for single-family homes in Orlando in recent quarters on this front.
GlobeSt.com caught up with Deb Marton, director of sales at Central, one of South Florida's largest homebuilders and is a subsidiary of 13th Floor Investments, to get her thoughts on how homebuilders are responding to foreign investors in part one of this exclusive interview. Be sure to look for part two of this series in the days ahead.
GlobeSt.com: As foreign investors continue to eye the single-family market, how are most homebuilders responding?
Marton: It's no secret that most foreign investors see value in investing in multifamily product since it is viewed as highly rentable and can yield continuous cash flow opportunities. This rings especially true today given the cash-heavy model driven by market factors.
In fact, according to the National Association of Realtors, approximately 50.6% of closed sales in the second quarter 2015 were all cash in Miami as compared to just 24% of home purchases in the US overall. And while multifamily will continue to be a dominant vehicle for foreign investment, single-family homes are growing in attractiveness among investors who want to rent frequently and/or sell quickly. As a result, most homebuilders are working to build the kind of product that can be bought and sold in volume—as evidenced by the growing number of luxury communities being developed specifically with the high end investor in mind.
GlobeSt.com: How is Central Communities bucking this trend?
Marton: Most new construction in South Florida targets high-end buyers from out of state or abroad, but there's strong demand for new homes within reach of first-time buyers and other middle-income residents. As concerns over affordability in the region loom, demand for single-family homes will remain on the rise.
Yet there are few communities to speak of that can provide new single-family homes at attainable prices to those who live and work here. By focusing its efforts squarely on the end user—rather than the investor—Central Communities is filling a void of mid-ranged housing product available within close proximity to South Florida employment centers. These buyers are looking to create value as a homeowner, grow their investment and build equity over the long-term.
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