If you’re planning to buy a home, do it now, because prices are going up for the next few years. This, according to Miami Real Estate expert, Dan Maza. His website, Miami Real Estate Trends offers luxury condos and waterfront homes for sale in the tri-country area.
After scanning the entire market on his site, it would appear that Investments in the single-family rental properties sector have good potential mainly in Broward County. While it is still the case the further north your travel in South Florida, the prices get cheaper per square foot, there is a clear disconnect in certain pockets which have a super star luxury reputation. It is still possible to get waterfront property in West Dade and West Broward for that matter, but prices are getting tighter.
At the core of the market demand is the willingness of lenders. Mortgages have higher risk than ever before as rates are low and banks are hungry to gain yield from offering up attractive teaser rates. This even though prices are clearly and smoothly rising as if the bubble never happened.
If you are looking outside the residential estate market, your best bets for investments in retail or restaurants are in Palm Beach County. Here there is a forever growing demand for medical office space. This is due to the demographic that has moved in over the years. Still an ever-present cliche, nursing homes have gone upscale. And the ultra luxury retirement village is a very clear motivator for commercial real estate investment in the area.
Regardless of the sector you choose to invest in, the demand for Florida housing is always growing. The economists, or professional neurotics always like to point out that the market is but is growing slower than specific data point in the past. And when it is not, they get out the bubble cries and tell us that it is growing faster than supply. It is never inherent demand which propels property prices higher they say, is it always the external forces on the market like mortgage lenders and overseas investors who don’t care about timing the market well.
Some interesting observations about the market database on Miami Real Estate Trends
It is worthwhile to note that the percentage of second homes increases as you head north from Miami. In some cases, it is up to 20 percent in Palm Beach County.
Home prices were strong in the last three years – up 40 percent – and I expect they’ll keep rising 10 percent a year.
How much of that 40 percent was from speculation in foreclosed condos? How much is from ‘real’ demand?
There are strong reasons to believe that from hereon we are looking at prices going higher than they ‘should’ – especially in Broward County – in other words a mini-boom that will fizzle after a few years. But this is excessive pessimism. Perhaps the main point is that flipping a fully developed house in a luxury market is no longer the best course of action if you require a swift exit.
Because rents held up better than home prices during the recession, buying property to rent out is an attractive option. This, in despite recent rise in prices, Palm Beach County seems more attractive while higher rentals in Miami-Dade and Broward make those cash rich prefer the southern counties.
Apartment buildings followed by retail and restaurants are a good option in Miami – at the right price.
Why is this the case? Because home prices will keep rising the next few years. The equity cushion for new mortgages will grow quickly. On the other hand, prices are almost too high in Broward and Miami-Dade already. Regular buyers will be squeezed by their teaser rates and mortgages will be at a risk of default. There is a complicated process keeping prices buoyant in the current market. The influx of high skilled labor and the continued investment by overseas cash buyers. If either of these two factors were to slow down, the current growth rate would be seen as a mere blip on the way to a downward trend. Even still, a courageous buyer would be smart to step in at that time and pay as much down as they could manage.
The climate for commercial investments in retail businesses and restaurants is best in Palm Beach County, where demand has grown quickly the last two years and average income is the highest.
Because of reasons already mentioned, Palm Beach will need office space for the growing number of healthcare workers.
While there is never a perfect time to invest in real estate, with the current market looking strong on all key economic indicators, it would seem that South Florida real estate seems like a pretty good investment if you have the means.