Miami’s roller-coaster real estate market is booming again after its worst crash left dozens of unfinished buildings and failed condo projects.
Related Group of Florida, Adler Group and Area Property Partners, are among builders developing amid a shortage of rental properties as the economy improves. The average rent for a two-bedroom apartment increased 6 percent to $2,568 a month in the third quarter, compared with the year ago period, according to Condo Vultures, a brokerage and consulting firm.
There’s a boom in Miami that we’ve never seen before, said Stephen Ross, chairman and founder of New York-based Related Cos. and owner of the Miami Dolphins football team, at the Bloomberg Commercial Real Estate Conference in New York on Nov. 13. Miami is probably the hottest real estate market in the U.S. from a residential perspective.
With most of the unsold, unoccupied condo towers that dominated the Miami skyline as recently as two years ago converted to rentals, the number of multifamily developments is soaring, according to Dallas-based Witten Advisors. The research firm forecasts as many as 3,000 rental units per year may be added through 2015 in Miami-Dade County, which includes the metropolitan area and downtown, more than double the average annual totals of the past three years.
Rental activity in greater downtown Miami, including for condos and apartments, jumped 12 percent in the third quarter to 1,650 from a year ago, Bal Harbour, Fla.-based Condo Vultures estimates.
Miami’s population grew 2.1 percent in 2011, the biggest increase in at least 10 years, to 2.55 million, according to the U.S. Census Bureau. Growth was helped by the continued influx from abroad, including ethnic groups such as Hispanics, according to Robert Cruz, chief economist at the Economic Development & International Trade department of the Miami Dade County government.
The region’s diversified economy, including international trade, health care and tourism, has helped attract workers, with joblessness in October falling to 8.9 percent from 10.7 percent a year ago, according to the U.S. Department of Labor. Many employed in the area’s leading sectors add to the rental pool as they can’t afford to buy, Cruz said.
Everybody thought Miami was finished, and now it has become again one of the top locations for developers for multi-family rentals, said Robert Kaplan, principal at Ackman-Ziff Real Estate, a New York-based adviser that helps to arrange financing for clients such as pension funds and insurance companies. Miami was counted as being out as recently as 2010 and in the course of a year or a year and a half the market has come roaring back. It’s simply amazing.