Miami Beach Florida real estate Market news
Is the Miami real estate market going to collapse? When reading articles or headlines from the domestic or international press it seems like a possibility. However, when analyzing each specific fact of the real estate market the answer can be widely different. The first factor to take in account is that all real estate segments of a region are never affected the same way.
Some pockets of strength coexist with areas of intense weaknesses. The Miami commercial real estate proves to be very strong and within the residential market there are also stunning variations. Prime locations of course hold up better than others. Within the residential real estate market all segments are not treated equally in Miami. Condos represent 2/3 of all properties in Miami, single family homes account for 1/3. Existing single family homes and new homes do not react the same way to a crisis. The fact is that new homes were hit dramatically everywhere in the US, but Miami does not have big tracts of land where developers could build new single family homes.
The Miami real estate market has been affected differently according to property price levels.
In the middle market segment (properties listed from $600,000 to $800,000) the average price of condos declined from 1% in November 2006 compared to November 2005.
At the high end of the spectrum (properties listed from $2000, 000 to $4,000,000) the average price rose 15%, showing a formidable resilience. The market moods do not impact the same way as with wealthy customers and others.
At the lower end of the spectrum prices rose 2%.
Weakness in the real estate market has been concentrated in certain market segments, economists just did not witness a whole market just collapsing. Prices at the top of the market have been historically driven by change in wealth, rich Americans are getting richer every year. The wealth creation has been phenomenal in the with its relatively low taxed environment and a dynamic economy.
The Miami real estate market benefits also from an influx of capital coming abroad from places like Europe with their strong Euro. The Latin Americans from places like Argentina and Brazil are coming to take advantage of a better economical environment or wishing to shelter their assets from political foes (Venezuela). The ultra wealthy class is expanding at a quick pace and therefore helps to sustain the luxury Miami real estate market
Contributed by MLR Realty
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