Miami Named Top 20 City for Building Wealth

Miami has been named one of the top cities in the United States for building wealth. According to Bankrate, Miami residents have an average debt burden of $25,644 and a 58% home ownership rate. While the chart below shows Miami as the only ranked city with a negative ratio of savable income, Bankrate highlights that Miami was adversely effected by a high population of retirees and older residents who are spending their retirement savings. The rankings also considered average income and expenditures, unemployment rate, education, retirement plans, homeownership rates, price appreciation and non-mortgage debt. Miami continues to be a hotspot for new development and continues to attract new residents and jobs.   

Median Rent Prices in Miami By Neighborhood Fall 2016

Rents in Miami continue to hold stable according to Zumper's fall 2016 rental housing report. The report reflects median rents for 1-bedroom units across 60 Miami neighborhoods. Data shows that median rents are down a bit in Edgewater, Brickell and West Avenue on Miami Beach. Essex Village and Flagler have the fastest growing rents and are both up 11% since Q2 2016. Fisher Island has the highest median rent for a 1-bedroom unit at $5,100 per month. With such a glut of new inventory hitting the market it is imperative for investors to stay current on rental prices across various neighbors over the next several quarters.   

3 Most Expensive Neighborhoods:

1. Fisher Island - $5,100

2. Park West - $2,500

3. Village of Key Biscayne - $2,350

3 Cheapest Neighborhoods:

1. Brownsville - $660

2. Pinewood Park - $880

3. Liberty City/ West Little River/ Gladeview - $900

Fort Lauderdale Rents Rise & Vacancy Falls as Shortage in Rental Apartment Units Hits

Fort Lauderdale has a growing demand for rental apartments and a limited supply with only a handful of new projects about to be delivered. For Lauderdale's vacancy rate fell to 3.2% in Q3 of 2016 while rents rose 8% year over year to an average price of $1,614 per month. Some of this is driven by potential buyers being deterred from buying a house due to an expensive housing market. Brossard has a $293,200 median price for a single family home. There are currently 7,300 residential apartment units under construction in Broward expected to be delivered before 2018. 1,800 of those are are in Fort Lauderdale. Without a surplus of new units coming to the market as in Miami, rents should continue to rise and vacancy should continue to fall. 

Chinese Interest & Investment in Miami Real Estate Continues to Slowly Grow

The Chinese share of the South Florida real estate market is expected to grow as Chinese investment in U.S. real estate is expected to reach $50 billion by 2025. Wealthy Chinese buyers are the top foreign buyers in the U.S. real estate market after spending over $27 billion over th past four years. Despite this, Chinese buyers represent only 2% of foreign home sales in Miami, trailing countries such as Brazil and Colombia. Miami is an attractive market for the Chinese as it is much more affordable than New York and San Francisco. They are also drawn by the stable and rising rental income in addition to the appreciation potential. Local brokers are already reporting an uptick in interest from Chinese buyers as both ISG and Cervera Real Estate have signed partnerships with Homelink International, which is one of the largest brokerages in China. Both CMC Group and OneWorld Properties have been marketing their Brickell Flatiron and Paramount Projects to Chinese buyers respectively. Additionally there has been a major push from the Great Miami Chamber of Commerce's Asia Task Force to approve nonstop flights between Miami and China. With the major push towards bringing Chinese real estate investors underway, look for an uptick in Chinese investment in South Florida to continue to grow and help pick up the slack left behind in the wake of unstable South American governments. Learn how Miami developers and agents are looking to China to boost sales from our September report. 

Downtown Miami Population is Surging

The population of Downtown Miami has grown by great lengths since 2010, according to a new report by the Miami Downtown Development Authority. Downtown Miami now has 88,540 residents, up over 150% since 2000 and over 32% since 2010. The average household income is more than double the national average, at $110,000 annually and over 50% of residents have a college degree. These numbers are primed to continue to rise as more units hit the market in Downtown including One Thousand Museum, Paramount World Center and the recently delivered Centro. Additionally the MiamiCentral Station and the Brightline will begin opening up Downtown Miami to easier access by train via Orlando, Palm Beach and other Florida metropolitan cities.

Miami Ranked 10th Most Expensive City in World For Average Monthly Rent

Commercial real estate firm CBRE has published that Miami is the 10th ranked city when it comes to world cities with the most expensive rent. Miami's average monthly rent was $1,868 per month, a number that is rapidly increasing as Miami is also 7th in the world when it comes to % increase in average monthly rental rate. The Next Miami has reported investors in Miami see an overall yield of 2.6%. Miami trailed other U.S. markets of Los Angeles, which led at $2,544 per month, and New York at $2,422 per month. Miami has begun to supplant itself as one of the leading major cities in the U.S. in terms of real estate and the market continues to look strong despite continued uncertainty. 

Miami Home Prices Rising During Q2 2016

Miami home prices are up 4.3% on a rolling 12-month bases as reported by Knight Frank Research Prime Global Cities Index. While Q1 2016 saw a cooling in home prices in Miami, they are rising at a steady clip in Q2 2016. New York is down -.5% while Los Angeles is up 3.1% during that same time period. Miami finished 2015 as the 6th highest priced city in the world in terms of Price Per Square Foot in Prime Real Estate at $1,000 per SF.

Shortage Reported in Miami Construction Worker Supply

Miami contractors are having a hard time finding available construction workers to hire for their projects. There are currently over 7,499 residential units under construction in Downtown Miami and Miami new construction was up 18% from July 2015 to July 2016. 14,700 units are under construction in South Florida with over 30,000 in the planning and pre-sales phase. The shortage in the supply of workers has led to an rise in pay as contractors scramble to attract new workers. The state of Florida added over 26,400 construction jobs, up 6% over last year the 2nd rank in the U.S., behind only California. Groundbreakings in Miami were up 83% over 2015 to about $576 million. 

Miami Developers & Agents Look to China to Spur Sales

Top Chinese real estate agents tour Miami's hottest new developments. Photo via MiamiHerald.com

As the Miami real estate market looks for a more diversified group of buyers, agents and developers are focusing on China as a new revenue stream where investment has historically been weak. Factors effecting this are Miami's new emergence on the world stage as a world class city to invest in, but also due to proximity and the fact that there are no direct flights between Miami and China. The Miami Herald reported in August that 20 of the top Chinese real estate brokers came to Miami to tour some of the top new projects. They are attracted by the affordability of the properties and value compared to other U.S. markets.

Only 2% of the home sales to international buyers in South Florida last year were to Chinese buyers. Despite this, during that same period Chinese investors spent $27.3 billion across other U.S. markets. Chinese investment has played a major roll in the continuously changing landscapes of New York and San Francisco real estate. China City Construction Co., a Chinese government owned developer, has purchased over $110 million of land in Brickell and Miami Beach. Additionally, Cathay Pacific Airways Ltd. is looking into a larger plane for long-haul flights between Hong Kong and Miami. Officials at Miami International Airport said that the flight could become a reality in the next 2 years.      

Miami is Currently The #1 Buyer's Market in the United States

The Miami real estate market is in a bit of a crossroads as it try to figure out which way to head. New inventory is hitting the market and unstable foreign governments have spun foreign interest in investment in Miami all over the place. One thing is for sure though, all the uncertainty has led to the potential for deals. Miami is currently a true buyer's market, and in fact is the strongest buyer's market in the United States. According to OpenHouse, 8 of the top 10 buyer's markets were in Florida. They are reporting that real estate demand in Miami is down as there are 4,332 active listings on the MLS but only 205 closed deals in the last 30 days. They are reporting that 61% of homes took over 3 months to sell while over 80% closed for below the asking price. 

Photo via OpenHouse

Top 10 U.S. Buyer's Markets

1. Miami, FL
2. Miami Beach, FL
3. Weston, FL
4. Sarasota, FL
5. Detroit, MI
6. Kendall, FL
7. Hollywood, FL
8. Pompano Beach, FL
9. Taunton, MA
10. Plantation, FL

Photo via OpenHouse

Photo via OpenHouse