Most of our readers probably consider the condo towers that are popping up all over South Florida to be a common sight by now. The local residential real estate market has recovered much better here than it has in other areas of the country over the last few years. However, according to a recent report, there may be problems on the horizon.
The recent report noted that several condo tower projects in South Florida have encountered issues with financing and demand. Many potential domestic buyers have left the area to head north for the summer months, leaving many condo developers dependent on foreign buyers. Those foreign buyers, however, are finding themselves increasingly pushed out of the South Florida market due to higher-than-average prices and costs.
Land development has played an important role in the economic revival that the South Florida area has been experiencing since the darkest days of the 2007-2008 recession. However, if investors and builders begin to take a more cautious approach to residential property developments in the area, that economic recovery may cool down more than many people may like.
That being said, real estate markets are often like a pendulum, with favorable conditions swinging back and forth, alternatively favoring sellers and then buyers. There is little doubt that for several years now the South Florida residential real estate market has favored sellers. Now, for anyone who is currently in the market for a condo, a slowdown in the accelerating housing costs could be a very good thing when it comes to negotiating contract terms and a sales price.
Source: Miami Herald, "At least a dozen new South Florida condo projects in limbo amid changing market conditions," Peter Zalewski, July 18, 2015