While everyone is busy trying to forecast Miami’s real estate market for 2016, it seems more important to take a look back to see how Miami got to where it is today, before projecting where it will be tomorrow. 2015 was the year Miami garnered coverage on being a global model for real estate— a pretty large feat for Miami’s real estate books.
In light of the New Year, it’s important that real estate professionals take note of the things Miami got right, in order to reuse and better understand Miami’s real estate trends as the industry continues through its cyclical progressions.
Interest of foreign investors
In 2015, Miami gained interest from a new type of overseas investors, including Canadian and Chinese buyers and developers. While Miami is still learning exactly what these foreign investors are looking for, increases in interest seem evident. The Conference Board of Canada, an independent, nonprofit research firm reported that flights from Canada to Miami have increased by 23 percent this winter.
The Miami Association of Realtors reported that Chinese buyers in Miami rose by 1 percent this year, having 42 percent of national Chinese buyers buying in Miami.
Legislative reform
The EB-5 program that was up for debate in 2015 just got renewed for another year.
The reform options for keeping the bill allowed foreign investments of $500,000 or $1 million dollars, as long as the money helped create jobs in the United States in return for a green card. This program served as a catalyst for economic development and job creation in Miami, enabling more real estate professionals to build in developing neighborhoods.
Success in developing areas
This year, areas such as the Bay Harbor Islands began catching the interest of many developers as up and coming neighborhoods. In November, it was announced that a community center and public library would be built, adding to its community feel and appeal. Developers began blueprinting plans and submitting ideas to continue to harness the potential of the neighborhood.
Redefining luxury
Affordable options took precedence this year as wealthy buyers, particularly wealthy foreign buyers, stopped needing an abundance of amenities and began asking for specifics that catered to their personal wants and needs. Miami, which has been previously known for its lavish real estate, deferred away from that image this year.
2015 saw less $10 million dollar penthouses, and a lot more moderately priced condos tailored for specific target audiences. Buyers focused more on location and current trends than additional perks and features.
Learning from past experiences and triumphs, the Miami real estate market will continue to draw in buyers with the hopes of additional success, come 2016.
Tim Lobanov is the managing director of the Verzasca Group. He has experience in the international real estate space, specifically identifying emerging market trends across both commercial and residential real estate.