Miami residential sales recovery rockets past rest of nation
By Yudislaidy Fernandez
After experiencing one of the worst housing market crises, Miami is making a strong comeback — above other major cities in the US — fueled by international investors buying local real estate with cash.
The coastal and desert regions in the US, including South Florida, are seeing significant sales activity compared to the rest of the nation, with foreign buyers representing the primary group actively scooping up homes and condos at discounted prices.
Regions like Southern California, Tucson, Miami and Las Vegas are seeing an increase in the number of units sold, said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, part of HomeServices of America, a Berkshire Hathaway affiliate that owns a network of 23 realty firms nationally.
On the other hand, the Midwest has taken a hit as its sales were greatly fueled by the first-time homebuyer tax credit, an expired federal program that during its run stimulated home buying in the US.
"When that money ran out, those sales decreased," Mr. Shuffield said. "They have not enjoyed the sale increases of the coastal and desert regions."
Although Florida is the top state for international buyers, this buyer segment is also actively taking advantage of deals throughout the country.
"International buyers are attracted to all of these markets because of the location and quality of life," he said. "Also, there's a wonderful supply of inventory to choose from."
But as these buyers continue to snatch up attractive deals, the home inventory is starting to shrink, Mr. Shuffield said, pushing up prices as demand remains strong.
For many international buyers, the currency exchange rates for the dollar are favorable, giving them an automatic advantage.
"With many of these currencies," he said, "it's almost like coming in with a 25% coupon" compared to a few years ago.
The foreign appetite for home buying is also encouraging more domestic buyers throughout the US, who have been waiting on the sidelines, to decide to buy now, he said.
In Miami-Dade, inventory is dwindling, with about 6½ months of supply remaining for condos and single-family homes. A healthy housing market is typically considered a six- to nine-month supply.
The buyer demand for newly-built, centrally-located condos in Miami's urban core selling at discount prices is rapidly absorbing Miami's condo inventory.
"South Florida is by far exceeding not only the goals for our assets, but also everybody else in the country," said Peggy Fucci, senior vice president of sales and marketing at ST Residential, which represents a large local portfolio of recently finished condo towers.
"We see the Miami market moving so fast that we're also looking to make sure pricing is in accordance with demand," said Ms. Fucci, who also oversees sales in Houston, Phoenix, Las Vegas, Atlanta and parts of California. "Prices are starting to increase based on that demand."
ST Residential's buyer mix in South Florida is made up primarily of Latin Americans and Europeans as well as national buyers, mainly from the Northeast.
With sales staying strong, Ms. Fucci said one of its towers, the 459-unit Infinity at Brickell, is expected to sell out by year's end.
The last condo boom left the Greater Miami area with 25,000 more condo units, primarily built in Miami's urban core and in the beaches, but the "absorption has been enormous," said Maurice "Moe" Veissi, incoming president of the National Association of Realtors, considered the largest professional trade association worldwide with more than 1 million members.
Nationally, "the home sales market has been stuck in neutral," Mr. Veissi said. "It hasn't done anything spectacular since 2009."
Absorption of more inventory is necessary for prices to begin rising, he noted, adding that a price jump is probably on the horizon for Miami — if sales activity remains strong.
In the US, home sales totaled 4.9 million in 2010, a 5% drop from 5.1 million in 2009, according to Miami Association of Realtors data.
This year, Mr. Veissi said, sales are projected to reach 5 million, up 2% from last year.
In Miami-Dade, home sales have been robust compared to the national figures.
Home sales were up 51% in 2009 compared to 2008, the data show, and the total increased 26% in 2010.
This year, local home sales are expected to grow by another 50% from last year.
"I would suspect that in a very short period of time," Mr. Veissi said, "Miami would have absorbed enough inventory to press those prices up."
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