The real estate market in South Florida, especially Miami, has been one of the largest casualties of the nation’s housing crisis from the onset. The market in the area has begun to recover and growth is expected to continue through 2012. Recovery in this hard hit region can be attributed to a record breaking amount of foreign investment purchases, strong condo purchases, and a strengthed rental market.
Foreign property investors flocked to the Miami area in 2011 to take advantage of low home costs. The majority of these investors purchased property using cash which further fueled the market’s growth. Over 60 percent of sales in 2011 in Miami were made in cash by foreign buyers. Led by Brazilians and Canadians, international investors spent more than $3.8 billion dollars in 2011 alone. Analysts of foreign purchase trends show a preference to condos or homes in a higher sales range.
In response to the influx of foreign buyers, the condo market has greatly recovered in 2011. Condo prices rose consistently throughout the year, an important sign that the overall market is recovering. In November of 2011 there were 1,064 condo sales in Miami-Dade County, an increase of nearly 2 percent from the previous year. The downtown Miami area has also greatly benefited from the increase in the condo market. Out of 23,000 condos built downtown during the building boom, only about 2,000 units remain unsold.
Throughout the region the rental market is expected to remain robust through 2012. Miami is seeing many former homeowners turning into renters along with traditional rental groups such as young couples and growing families. In fact, the rental market is actually helping spur home sale growth as investors are purchasing low cost properties to convert into rental units. Miami’s rental market grew by over 95 percent in 2011 and rental prices are up 2-3 percent.
While Miami’s real estate market is still not out of the woods, the market’s condition is expected to improve in 2012 through foreign investment purchases, condo purchases, and a thriving rental market that is driving sales upward.