There is no denying that today’s Miami real estate market differs markedly from the one we experienced a few years ago. If we look at an overview of Miami’s rebound, we can see that the real estate market has improved substantially in many ways. Home values have increased, the number of distressed properties has dwindled, and there is a healthy amount of activity every month, among other positive changes. Interestingly, however, this recovery has not occurred evenly across Miami-Dade County. More specifically, certain zip codes in the greater Miami region have made drastic gains while neighboring zip codes have experienced minor improvements.
For example, in the higher-priced areas of Miami, such as Coral Gables and Pinecrest, home values fell about thirty percent from peak to pit, whereas the average home value in the county plummeted about forty-five percent. In addition, in those same upscale neighborhoods, home values are now about seven percent lower than they were during the peak. The average home value in the county, on the other hand, is still more than thirty percent below the peak. In essence, real estate activity in the affluent areas is churning full steam ahead, but improvements in the less well-off areas are sluggish at best.
One reason for this skewed progress is that buyers’ interests, and the demand resulting therefrom, has shifted. The urban scene is attracting residents, which has caused prices in the neighborhoods closer to downtown to skyrocket. However, as developers continue to break ground in Brickell, Downtown, Midtown, and Edgewater, these prices may level out a bit. In addition to Miami residents relocating east, the demand from foreign purchasers has helped push up prices, particularly for Brickell condos. It isn’t a surprise that wealthy buyers with cash are more likely to snag these sorts of condos. But, the designs, features, and amenities in many of the buildings actually seem tailored for the overseas investor. Many of the developers recruited famous architects and designers from other countries to oversee every aspect. The star power and attention to detail obviously add to a building’s allure.
The sad reality is that the average Miami resident cannot afford a median priced condo in most of the neighborhoods east of Interstate 95. Home values in the more middle-class friendly markets, such as the Kendall and Coral Reef areas, have certainly improved, but the gains have been slight and gradual, especially when compared to the luxury market. Fortunately, the South Florida economy has made and continues to make amazing progress, and there is a positive outlook going forward. Hopefully, such economic progress will spread to the rest of Miami’s zip codes and close the current gaps in the real estate recovery.