Overseas Buyer Influx Continues to Pump Up Miami Market
The reinvigoration of for-sale multifamily housing continues apace in certain markets, such as greater Miami, which is popular not only among U.S. citizens but also overseas investors.
By Dees Stribling, Contributing Editor
Miami—The reinvigoration of for-sale multifamily housing continues apace in certain markets, such as greater Miami, which is popular not only among U.S. citizens but also overseas investors. “International buyers in Miami have fueled an unprecedented recovery unlike any other in the nation, increasing demand and limiting supply of homes,” Ralph E. De Martino, 2011 Miami Association of Realtors residential president, said recently. “We’re fortunate because Miami combines all of the attributes that are expected to attract international buyers long into the future.”
According to the Miami Realtors, sales of existing condominiums increased 2 percent year-over-year in November 2011, the most recent month for which numbers are available, from 1,039 units to 1,064 units. Moreover, condo prices are edging up: The median sales price of condominiums in metro Miami in November 2011 was up 18 percent to $125,000 compared with the same month in 2010.
Most international buyers pay in cash. Nearly 90 percent of international buyers in Florida purchase properties all cash, the Miami Realtors note. Nationally, all-cash sales account for only 28 percent of transactions, reflecting the strong presence of international buyers in the Miami real estate market.
Upper-end Miami condo projects—some of which took a severe drubbing during the Great Recession—are reporting brisk business these days, much of which is being fueled by buyers of other nations eager to own a Miami-flavored slice of the United States. The Residences at W South Beach, for example, reports a global mix of buyers, with 65 percent from international markets that include Brazil, the United Kingdom, France, Spain, Portugal, Poland, Russia, Turkey and Nigeria, according to David Edelstein, the property’s co-owner and developer.
Americans are still buying at W South Beach, too. The property’s domestic buyer profile includes residents with first homes primarily along the East Coast, including New York and South Florida, as well as those from other U.S. cities such as Nashville and St. Louis.
The influx of buyers has allowed W South Beach to endure the recent downturn in good shape, sustaining “well-above average pricing,” says Edelstein. The property has realized a total of $250 million in sales to date, following a series of 40 closings between May and September 2011 with prices averaging over $1,600 per square foot.
In fact, the 408-unit oceanfront condo-hotel has maintained its premium price points since sales started in 2006, just before the market crash that popped the South Florida real estate bubble, bringing a number of projects to a halt, temporary or otherwise. Pricing at W South Beach continues to exceed that of its neighbors, with many of surrounding properties selling at over $1,000 per square foot.
