Tough Times Ahead for South Florida Real Estate?

Many in the Miami real estate market are asking if another bust is on the way. A recent article in The Real Deal by Sean Stewart-Muniz suggested that the answer is more complicated than a simple yes or no.

Although the Miami market has shown a significant downturn in the past few months, there is no reason to panic. Anthony Graziano, of the research firm Integra Realty Resources, declared “2016 is going to feel like a one-legged marathon.”  Speaking to a group of 80 agents/brokers in the Brickell City Centre sales gallery, Graziano gave a candid summary of the Miami real estate market.

Sales are down, listing inventory is up, and sellers are still aiming for “aspirational” prices – which puts a strain on the market. What that means for agents is that listings are going to stay on the market longer than they have in recent years. Graziano said the important question to ask is, “are sellers going to get serious in 2016?”

Because of a new wave of resales, condo sales in particular are hurting. However, the trends for existing inventory do not translate to new developments, and the newly built condo units will usually outperform those already on the market.

A key factor to consider is competition. Graziano believes that of the new buildings recently opened, 20% – 40% will be offered for sale, while an additional 20% – 40% will be marketed for rentals.

Pre-construction condos are vying for buyers among the existing inventory, and unit owners who turn to renting will be in competition with the 4,500 downtown rental units currently under construction.

Graziano wrapped up his presentation by saying he is confident that the current transition period was due to a downturn in “global economic conditions that cannot last forever.”

Steve Owens, president of Swire Properties and host of the event, has been through several of these downturns – especially as it pertains to the devaluation of Latin American currencies. He challenged a recent report in the Wall Street Journal “that connected a huge condo pipeline to a ‘looming’ market bust in Miami.”

Owens believes that the market slowdown is not a bad thing for Miami, and may actually be a good thing for the area.  “The pause in the market is the most healthy thing that could’ve happened to us,” he said, “it’s a more healthy market than I’ve seen in Miami in a long time.”

Let’s hope he’s right!

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