After condo sales plummeted in Greater Downtown Miami at the start of the pandemic, the area’s residential market is showing signs of a substantial recovery, fueled in part by the surge in population growth.
A report released Wednesday by the Miami Downtown Development Authority, created by Lambert Advisory, found that the average condo price is back on the rise after falling to $553,000 last year. In the second quarter of this year, the most recent period that data is available, the average price rose to $607,000, a nearly 10 percent increase. Still, that’s below the record high price in 2019 of $643,000.
The report defines the area as including downtown Miami, Brickell, the Arts & Entertainment District, Edgewater, Midtown, the central business district, and Overtown.
South Florida’s residential market has boomed since last year. Single-family home sales benefited the most once lockdowns were lifted last year, and that later trickled down to condo sales.
Occupancy and rents for apartments in Greater Downtown Miami have also grown dramatically this year compared to years prior. The vacancy rate fell to 5.9 percent for all inventory, and to 7 percent for new buildings.
Bidding wars for rentals have become common in some parts of Greater Downtown Miami, including Brickell. The central business district, a historically commercial area immediately north of Brickell, has seen slower rent growth, rising 1.4 percent annually between 2011 and this year, the report shows. Rents are highest in Brickell and Edgewater. In Brickell, average monthly rents reached $2,710.
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Related Group Chairman and CEO Jorge Perez said rents in the overall Miami market have increased 25 percent in the last year. Speaking generally, he said the “demand factors” are stronger than ever before.
“We’re seeing a huge, huge exodus of households from the Northeast, Northwest, even California, and still having the huge number of Latin Americans coming here with more than a sprinkling of Europeans,” Pérez said at the National Association of Real Estate Editors conference in Miami on Wednesday. “Corporations are moving here in large numbers. This will sustain the growth for a long period of time.”
Still, “as prices increase and more supply enters the market, then we are going to see a slowdown again. There is no question in my mind,” Pérez said about the overall South Florida market.
Rental inventory in Greater Downtown Miami has more than doubled since 2012, according to the report. More than 5,900 apartments have been completed in the last two years, and another 5,900 units are under construction.
Condo inventory is expected to grow after a lack of new deliveries in 2020 and just 249 new units completed this year. Nearly 2,600 condo units are under construction and expected to be delivered in the next three years.
Though presales are not included in the report, developers have begun sales for a number of projects this year, including the first two phases of E11even Hotel & Residences in the Park West neighborhood. Phase one nearly sold out within two months of launching sales.