Miami-Dade County’s real estate market is showing signs of recovery. The reason: wealthy buyers, both local and foreign.
After the real estate crash of 2007, development stalled in Miami – a situation mirrored in other parts of the United States. A rash of home foreclosures affected one in five households and nearly 200,000 families in South Florida defaulted on mortgage payments.
While plans for high-rise buildings were a dime a dozen, most home sales resulted in bank repossessions. As buyers fled, the Magic City – typically an embodiment of decadence – struggled with incomplete construction projects, recanted deals and squatters.
Since the beginning of this year, however, things are looking up.
Foreign investors and multinational developers are channeling funds into local property, thus beginning the resurrection process of Miami’s construction market.
“The Brazilians walk in, they don’t even negotiate,” said real estate tycoon Gil Dezer to The New York Times. “It’s a no-brainer for them.”
By mid-year, home sales had increased by 16 percent from 2010, reported DataQuick, a research firm. Sales worth at least $2 million also rose by 13 percent from last year.
The economy’s sharp decline in 2008 created a situation where supply far outweighed demand. Now, developers say home values have improved given that there are 48,000 properties for sale, as compared to 108,000 from three years ago.
While developers are hesitant to call this upward trend a “boom,” investments from multinational companies have resulted in the emergence of large-scale mixed-use development projects.
With the Obama administration conferring with mortgage providers for new procedures for those in dire straits, new foreclosures have trickled down and old cases are snared in legal battles.
“People should thank the foreclosure mills,” Peter Zalewski, founder of Condo Vultures, told the Times. “They gave the whole market a reprieve.”
Although there is no saying whether Miami’s fragile housing market is on schedule to come roaring back, it currently appears to be faring better than other cities embroiled in housing crises like Phoenix and Las Vegas.
“People thought it would take at least a decade to get back to this point,” Zalewski said.
Source: The New York Times