At the height of the meltdown of the housing market in Miami-Dade County in 2008, the number of months needed to absorb existing inventory was at 29.7 months for single family housing and 40.4 months for condominiums but many experts believed the absorption period could be up to 10 years. Fast forward to the end of 2012 and these figures have decreased dramatically, the absorption period is now at 4.4 months for single family and 5.0 months for condominiums. These current periods rank second lowest in the last 10 years, higher only than the 2004 market — the height of the housing bubble — when the respective figures were 3.4 months for single family residences and 4.5 months for condominiums.
This chart, distributed at a recent panel discussion of experts in the real estate business sponsored by the Miami-Dade Chamber of Commerce, illustrates that condo inventory (red line) has been dropping since 2008, and condo sales (purple line) have been on an upward swing since 2008.
Accounting for the dramatic recovery of the market at a rate faster than anyone could have imagined is the significant influx of foreign money flowing into the market, a trend that is expected to continue. South American buyers, determining that there were deals to be had, have been snapping up multiple units. In addition, projects coming out of the ground are few and far between, essentially providing little or no additional inventory. It was only in 2012 that new projects started coming out of the ground.
Rosy Future Predicted for Miami’s Residential Real Estate Market
The panelists at the conference sponsored by the Miami-Dade Chamber of Commerce all acknowledged that Miami is a “hot” market based on national and international perceptions. The city has also seen a substantial influx of national and international regional offices, as many national and international companies are eager to reflect a Miami office on their business cards.
The panel presented a rosy picture for future growth and appreciation in the residential real estate market. Miami’s housing prices, while not at the bargain basement rates available in 2009 and 2010, are still considered cheap as compared to other national and international gateway cities. Substantial future price growth is expected.
Please click here to view the chart: Inventory and Sales Miami-Dade County 2002-2012.