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It’s a big win for all the current property owners though.
Agreed...I have been here two years and my condo's market value has increased considerably... not that I'm going anywhere anytime soon. Still nice to know I've built equity already.
I pay close attention to the condo markets in both Boston & NYC. Miami is still a relative bargain comparted to those two cities. The average Miami condo in a decent neighborhood is still a minimum of 60% the cost of an average condo in either of those two cities at current market prices. The rise in interest rates has less of an affect on the Miami market as most of the condo purchases are cash deals. Theoretically, condo owners in the Northeast with at least 60% equity in their property can afford to pay cash here in Miami.
IMO the population of northeast cities are getting older. People in those cities who prefer an urban environment who are approaching retirement and are sick of winter are flocking here. I am an early retiree and I was considering "snowbirding" at one point but decided to live in Miami full time. I still have many friends and family in the Northeast and fly back and forth quite often. The proximity to the airport, relatively short flights and mid-week ticket prices sealed the deal for me. The work from home shift may also be a contributing factor as discussed on this forum many times in the past.
Elchevere makes a good point about the rise in population attracting additional world class restaurants and retail. This may be creating a snowball affect.
I agree. I was just providing a possible explanation as to why one might not agree.
Is there a point that even with rising home prices for owners it might not be a win?….I suppose if and when masses of homeless tent cities invade and pop up in the nicest sections of our nicest neighborhoods of Miami and our prime retail centers (Aventura, BCC, Design District, Bal Harbour, Merrick Park) are half vacant with stores boarded up and leaving en masse, then that will no longer be a win. Hasn’t happened here—at least not yet—but has already happened elsewhere.
Also a good point but I don't believe the leaving en masse and homelessness will ever get to that point in Miami. While there is a large disparity in income in Miami, I think the gap is much wider in NYC/Boston/SF because more of the population are high income. Don't get me wrong, there are many high wage earners in Miami, I just don't think it's as big a percentage of the population as cities driven by the tech or financial industries. The population of those tech/finance driven cities are increasing because of the high paying jobs. Those high wager earners are buying up every piece of real estate in every corner of the cites and are driving up rent prices for people on the lower end of the economy because of lack of supply. There is some of that going on in Miami but not to the degree as the other places I've mentioned. No matter how much we like to banter about Miami being a tech city on the rise, we are not. We are mostly a tourist/leisure driven economy and the number of jobs on the higher end just are not as available.
Also a good point but I don't believe the leaving en masse and homelessness will ever get to that point in Miami. While there is a large disparity in income in Miami, I think the gap is much wider in NYC/Boston/SF because more of the population are high income. Don't get me wrong, there are many high wage earners in Miami, I just don't think it's as big a percentage of the population as cities driven by the tech or financial industries. The population of those tech/finance driven cities are increasing because of the high paying jobs. Those high wager earners are buying up every piece of real estate in every corner of the cites and are driving up rent prices for people on the lower end of the economy because of lack of supply. There is some of that going on in Miami but not to the degree as the other places I've mentioned. No matter how much we like to banter about Miami being a tech city on the rise, we are not. We are mostly a tourist/leisure driven economy and the number of jobs on the higher end just are not as available.
I like to think of Miami as an emerging finance hub, but it may not be either since Palm Beach County has taken so much of it. Today, it's almost like Miami is the new NYC and PBC is the new Connecticut. I think it would be better for South Florida overall if it were just concentrated in one place.
Makes sense with all that $$ going down and the ultra rich buying up property (however, living there part time) but at the expense of locals.. I wouldn't see that as a "win"
Look, the "locals" aren't buying 25mm homes on Star Island. The average person couldn't pay the property tax bill on one of those places, never mind owning one.
I recently sold a house for 4X what I paid for it, I then put another 15% with it and bought a bigger brand new house 5 miles away. I've lived in Florida since the mid 70's so while I'm local I'm certainly not losing out.
I'd also add to the discussion about the locals as being someone whose only been here fore about 15 years. There are a lot of locations that locals seem to avoid because they aren't the current hip neighborhood. As an example when I moved here I was able to purchase a home in the Roads for $450k. Now less than 10 years later knock downs are selling for $1M+ and the newer homes are selling for $3M -$4M. The wealthy moving here has only helped me.
Unlike NY there are a ton of areas to buy homes for a reasonable price. The issue is that people don't want these homes because the area they are in. To them these are bad areas and they would rather rent in a better area than buy in a lesser area. In NY you simple don't have the option of buying a home in a centrally located "bad area".
This is a 3 bedroom house that sold for $323k. Even with interest rates where they are at you should be able to get a mortgage around $2500. How many local people would rather pay MORE than $2500 to rent a ONE BEDROOM apartment. Then they look up years from now when they outgrow the One bedroom and need more space and complain that the same house is $600k. Most locals, especially the younger ones don't care about investing in their future. When I bought my house for $450k I could of stayed renting in a much cooler location in a building with pools with hot and cool plunges, gyms and all the other amenities they build today. However I chose to move into an older house with no amenities, crappy finishes, cut my own grass, etc. and now I'm benefiting from that hard work.
So the wealth coming here isn't at the expense of all the locals, its at the expense of people who want to have their cake and eat it to.
I wouldn't put much stock in this number. Think about it - the number of real estate transactions is super low right now, no ones buying or selling due to the horrible rate environment. Yet the numbers from those miniscule transactions are setting the valuations for the entire area, so a couple thousand transactions could fluctuate the "wealth" of the area by many billions.
I don't think we'd have a real gauge on true property values until there's a healthy amount of transactions.
I wouldn't put much stock in this number. Think about it - the number of real estate transactions is super low right now, no ones buying or selling due to the horrible rate environment. Yet the numbers from those miniscule transactions are setting the valuations for the entire area, so a couple thousand transactions could fluctuate the "wealth" of the area by many billions.
I don't think we'd have a real gauge on true property values until there's a healthy amount of transactions.
Anything that's a good still has bidding wars because there's so much money on the sidelines waiting to buy and much of that money is all cash. However, the stuff being offered today is largely commodity or not very functional and that stuff has just been sitting on the market for months.
“Our economy here in Florida is when California was circa late 1960’s where it really started to expand,” Prof. Johnson said. “There was always the weather and the salt water, but now the professional opportunities are here as well. This expansion is going to go on for quite some time — and we’re going to be talking about housing for quite some time.”
“More than three years into a mass migration of both money and people to the Sunshine State, Florida’s property market continues to outperform nearly all of the rest of the US. What began as a warm-weather haven from pandemic restrictions, has turned into a place not only catering to the current influx of professionals but doubling down on the premise that even more are still to come.”
“Indeed, Florida is the No. 1 destination for professionals aged 25 to 36 earning at least $200,000, according to a recent report by financial advisory SmartAsset.
Most crucially, high-earners arriving in Florida have outnumbered those departing by over three-to-one in recent years.”
“In Miami, New York’s Related Cos and Swire Properties are taking the highest-profile bet yet that Miami’s human and economic capital migrations are both permanent and ongoing…..
The missing link “is quality office space, and that’s the gap we’re aiming for,” said David Martin, senior vice president of retail and commercial leasing for Swire’s US operation. Indeed, office vacancies stood at just 10.4% in the second quarter of this year in Miami-Dade County, according to Colliers, compared to a record-high of 17.8% in Manhattan and over 30% in San Francisco. The city’s downtown is also now an easier commute to Boca Raton and Palm Beach thanks to the new $6.2 billion Brightline high-speed rail service.“
Last edited by elchevere; 10-07-2023 at 03:33 PM..
“Our economy here in Florida is when California was circa late 1960’s where it really started to expand,” Prof. Johnson said. “There was always the weather and the salt water, but now the professional opportunities are here as well. This expansion is going to go on for quite some time — and we’re going to be talking about housing for quite some time.”
“More than three years into a mass migration of both money and people to the Sunshine State, Florida’s property market continues to outperform nearly all of the rest of the US. What began as a warm-weather haven from pandemic restrictions, has turned into a place not only catering to the current influx of professionals but doubling down on the premise that even more are still to come.”
“Indeed, Florida is the No. 1 destination for professionals aged 25 to 36 earning at least $200,000, according to a recent report by financial advisory SmartAsset.
Most crucially, high-earners arriving in Florida have outnumbered those departing by over three-to-one in recent years.”
“In Miami, New York’s Related Cos and Swire Properties are taking the highest-profile bet yet that Miami’s human and economic capital migrations are both permanent and ongoing…..
The missing link “is quality office space, and that’s the gap we’re aiming for,” said David Martin, senior vice president of retail and commercial leasing for Swire’s US operation. Indeed, office vacancies stood at just 10.4% in the second quarter of this year in Miami-Dade County, according to Colliers, compared to a record-high of 17.8% in Manhattan and over 30% in San Francisco. The city’s downtown is also now an easier commute to Boca Raton and Palm Beach thanks to the new $6.2 billion Brightline high-speed rail service.“
If you break it down further
- Net gain for all of Florida for those earning $200,000 was 2,175 people. In a state of 21M people, that's nothing.
- Building office space with no anchor tenants, risky. One Brickell City Centre already got downsized and is no longer a supertall and reduce the overall office space component.
- Corporate HQ relocations, Miami is behind Jacksonville and Tampa, and surprisingly, two cities in Massachusetts saw the highest HQ relocations (Waltham at a staggering +175%, Burlington at 133%).
- Florida's Infrastructure will not be able to handle the influx, it's a ticking time bomb.
- Affordability remains an issue, wages in Miami/FL are still way below national averages, while income inequality keeps increasing.
- Insurance crisis in Florida will definitely impact investments and appetite to remain there. If insurance companies are leaving and do not want to cover homes, businesses, individuals or jack up prices by 100%+, that should tell you something...
- MDC vacancy rate shot up in Q3, Brickell is now at 12% vacancy, CBD in the 20% again. Some companies have even cancelled their leases/expansion plans in Brickell/downtown and will rely on shared spaces or have gone to WPB. Commercial real-estate is slowing down and remote work is not going away. Developers attempting to build large office towers when commercial real-estate is crashing is a wild move, especially with Miami having a return to office workers hovering at 50%. Another interesting thing is developers are selling buildings in Miami (at record prices) to finance other projects in other major cities.
“Our economy here in Florida is when California was circa late 1960’s where it really started to expand,” Prof. Johnson said. “There was always the weather and the salt water, but now the professional opportunities are here as well. This expansion is going to go on for quite some time — and we’re going to be talking about housing for quite some time.”
“More than three years into a mass migration of both money and people to the Sunshine State, Florida’s property market continues to outperform nearly all of the rest of the US. What began as a warm-weather haven from pandemic restrictions, has turned into a place not only catering to the current influx of professionals but doubling down on the premise that even more are still to come.”
“Indeed, Florida is the No. 1 destination for professionals aged 25 to 36 earning at least $200,000, according to a recent report by financial advisory SmartAsset.
Most crucially, high-earners arriving in Florida have outnumbered those departing by over three-to-one in recent years.”
“In Miami, New York’s Related Cos and Swire Properties are taking the highest-profile bet yet that Miami’s human and economic capital migrations are both permanent and ongoing…..
The missing link “is quality office space, and that’s the gap we’re aiming for,” said David Martin, senior vice president of retail and commercial leasing for Swire’s US operation. Indeed, office vacancies stood at just 10.4% in the second quarter of this year in Miami-Dade County, according to Colliers, compared to a record-high of 17.8% in Manhattan and over 30% in San Francisco. The city’s downtown is also now an easier commute to Boca Raton and Palm Beach thanks to the new $6.2 billion Brightline high-speed rail service.“
Such a young city compared to the other cities Miami is compared to. The best is yet to come and the wheel is firmly in motion! LFG!
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