Commercial, Residential

Part 2: Miami Real Estate Market – Where Are the Buyers Coming From?

Foreign investment has played a key role in America’s recovery from the housing crisis. A hub of foreign investment, the Miami real estate market, is experiencing a continued flow of foreign capital. Where are the buyers coming from?

The Miami Real Estate Market

The Miami real estate market features flashy mansions, Millionaire’s Row with yachts parked on the bay, South Beach High Rises, a seemingly never-ending supply of capital flowing into Brickell, the Design District, and Edgewater. But the buyers of this prime real estate have appeared to dry up. What is the current Miami real estate market? Why has the market slowed, and where are the future buyers coming from?

1425 Brickell Ave # 1, Miami, FL 33131
1425 Brickell Ave # 1, Miami, FL 33131

The residential Miami real estate market started recovering from the 2008 meltdown in 2011 and has steadily risen since. In examining the reason for the rise, it is a known fact that many if not most investors were buyers that came from outside the state of Florida, and indeed, outside of the United States. This is a prime example of why International Real Estate . News is more relevant than ever before. In 2015 alone, roughly $2.6 billion worth of real estate sales in South Florida were from foreign investment predominantly from South America.

Florida has been an attractive destination for foreign buyers thanks to its high rates of job creation, economic growth, and weather. Miami is the undisputed crown jewel of South Florida. The properties going to foreigners are worth more than the median home sold in the area. The median listing price for a home in Miami is around $440,000. That’s the price tag where Americans are living.

 The International Investors Are Living In Another World

Those buyers are in the half a million to the million-dollar range, if not more. There are no two indicators more directly aligned than household income and real estate prices, period. When we look for the highest income households in America, they align with the highest residential prices.

950 Brickell Bay Dr Apt, 4604, Miami, FL 33131 selling for a half million
950 Brickell Bay Dr Apt, 4604, Miami, FL 33131 condo selling for a half million

However, there is a group of investors from all over the world that have the higher net worth and household incomes. They, collectively, are now the critical driving force for selling real estate.

Miami has been especially dependent on Latin investment. For Brazilians, Argentinians, Colombians, and Venezuelans, Miami is a second home. It’s bilingual. It’s bicultural. They can get around easily. It is simply the de facto capital of Latin America.  But these counties are restricting the movement of their capital. In cases like Brazil and Venezuela, where the politicians have literally stolen a huge part of the wealth of the country, this heavily impacts places like Miami Beach. It is now more than ever imperative that brokers find alternative nations for their real estate products.

Where Miami Buyers Are Coming From

Look no further than all the new airlines landing in Miami. From WOW, taking passengers from Iceland to Miami for $99, or Air Lingus flights straight to Dublin. The Miami airports are greatly expanding to service visitors more easily and cheaply from all over the world. However, the most exciting prospects are now Chinese, Canadian, Mexican and European buyers. First Air from Canada and Volaris from Mexico have recently started landing on these runways and there are talks of a direct Miami to Shanghai flight at some point in the next two years due to serious interest. A lot of luxury buildings have already translated their marketing materials into Chinese for future sales.

Photo provided by Adam Moss
Photo provided by Adam Moss

Peggy Fucci, CEO of OneWorld Properties, that sell luxury apartments in Miami, recently stated that 70% of the buyers are international. She further stated that they are coming from 38 different countries, not just in Latin America. In fact, even Europeans are buying up the properties. Fucci goes on to say that there are lots of buyers from France and some are either looking to move here full time or just invest in Miami for cash flow.

In summation, although Latin America will still dominate the Miami Real Estate Market, investors from there will only return to the market when their currencies rebound. In the meantime, it is obvious that the future sales will be coming from Canada, Mexico, Europe, and excitingly China.

 

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David Farron is the Co-Founder and CEO of InternationalRealEstate.News. A seasoned data analyst, he is an expert in international financial markets and has managed sizable budgets for a myriad of programs, including for UBS and Bloomberg. As an entrepreneur, his vision is to create a multidisciplinary platform that optimizes the best of technological applications and human talent to the benefit of the international real estate market.

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