Salient to Investors:
Miami’s roller coaster real estate market is booming again. Condo Vultures said the average rent for a 2-bedroom apartment increased 6 percent to $2,568 a month in Q3 versus a year ago. Peter Zalewski at Condo Vultures said any developer building near the water in Florida is likely building rentals for the financing but with the ultimate goal to convert into condos – developers of rental properties in suburbs may be the only ones looking to maintain properties as rentals. Zalewski said everything starts and stops with lenders which is why developers are building rentals, but who wouldn’t want to build and be sold out immediately rather than have to wait for profits?
Witten Advisors said the number of multifamily developments is soaring as most of the unsold, unoccupied condo towers of two years ago have converted to rentals Wiiten forecasts as many as 3,000 rental units per year may be added through 2015 in Miami-Dade County.
The median sales price of Miami-Dade condos rose 24.2 percent to $146,000 in October versus a year ago.
Robert Kaplan at Ackman-Ziff Real Estate said Miami has become again one of the top locations for developers for multi-family rentals after being counted out as recently as 2010.
RealtyTrac said foreclosure filings in Florida fell 13 percent last month from a year earlier, but still leads the nation.
Timothy Martorella at Madison Capital said the biggest difference in Miami to other markets is how far it fell and how quickly it came back, defying all previous predictions.
In many other regions of the US, investor interest is starting to wane in the sector as record low mortgage rates help potential homebuyers.
Axiometrics said that while rents are projected to rise through 2017, the rate of annual growth peaked in Q2 2011 at 5.1 percent and are on pace to gain 4 percent nationally in 2012.
Ezra Katz at Aztec said lenders are attracted by Miami’s shortage in rentals and because everybody wants to be in the apartment market because financing is pretty readily available – rental apartments are much less risky than condos and have a long history of not tanking. For renters, buying a condo may ultimately become the goal again as rents continue to climb and you can squeeze only so much out of a renter.