According to an article in therealdeal.com, the real estate market in Miami is levelling off slightly, thanks to foreign currencies being devalued and this was the discussion of a recent conference in Miami.
This could mean that many developments planned for this year will now not go ahead, lowering construction costs. Real estate experts think this could be a good thing as there has been a substantial amount of overbuilding in this market which is highly dependent on overseas buyers. Foreign buyers account for about 80% of luxury condominium purchases and the decline in the value of foreign currencies has had a big effect in dampening down the real estate market.
Even without any price increases, the cost of buying a condo has doubled for buyers from Brazil which has to be a major consideration when deciding to purchase a property. On the other hand, real estate in Miami is still quite a bit cheaper than in other major cities in the world and the United States is still regarded as being a safe haven for buyers looking to invest their money.
One problem faced by the real estate market in Miami is how to make it more appealing for local buyers. Real estate experts think there is a need to build properties that are affordable by locals and which are priced between $200,000 and $400,000, rather than high-end luxury properties aimed at enticing investors.
Up and coming neighborhoods that are more likely to appeal to locals include Wynwood, Little River and Allapattah. One important factor to take into account is the need for people to be able to live and work in the same area, so there is less need for a car, particularly with an increase in congestion and traffic levels. A possible solution discussed at the conference included connecting neighborhoods, as this would help to reduce congestion and traffic levels.
In the meantime, prices of commercial real estate are increasingly substantially as buyers are faced with a limited amount of good quality property. An example is Wynwood, where commercial prices have increased from $200 per square foot to $1,000 per square foot in just a few years.