LATIN AMERICA HELPS KEEP REAL ESTATE APPETITE STRONG IN MIAMI
Levy Public Relations
Miami, Dec 16 (EFE).- Inflation and rising interest rates will affect the South Florida real estate market in 2023, but it will still remain strong thanks in part to foreign buyers, mainly from Latin America, which in 2022 were number one, according to specialists consulted by EFE.
“The general rise in prices, a lower flow of money and mortgages at 6.5% slow down the real estate boom that took place during the pandemic a bit, but the sector “will continue to be strong in 2023 and many people in the US, Latin America and Europe will want to keep coming,” Jennifer Wollmann, from the real estate firm Berkshier Hathaway, from EWR Realty, told Efe on Friday.
Housing inventory in South Florida remains tight, but the rise in prices for single-family homes, townhouses, and condominiums (apartments) is slowing.
“It’s not that prices go down, but that they level out,” Wollmann said, in part because “offers” for home purchases have loosened, that is, “if before there were 10 offers at the same time to get hold of the same house, now there are 2 or 3”, he clarified.
SOUTH FLORIDA WILL CONTINUE TO BE A REAL ESTATE HOT SPOT
“But the market is not going to stop. People continue to buy, “especially in the luxury real estate sector (from $1 million), where interest rates don’t matter because they pay in cash, without asking for a mortgage,” he said.
In addition, he adds, the wave of populist left-wing governments in Latin America and the crisis and instability in the region continue to encourage the outflow of capital and investment in South Florida.
In its report on foreign buyers in 2022, the Association of Realtors of Miami highlights that they bought residential properties worth 6.8 billion dollars, 34% more than in 2021 (5.1 billion).
Argentines, with 16% of purchases made by foreigners, Colombians (13%), Peruvians (8%), equal to Canadians), Venezuelans, Mexicans, Chileans and Brazilians (6% each) and French and Italians ( 3% each), were the biggest buyers this year.
For Stephen Bittel, general manager of the Terranova Corporation agency, the year 2023 “will be the story of two cities: Miami and Austin (Texas)”, cities that will continue to surpass the nation, while New York, Chicago and San Francisco will continue to suffer exodus of population and companies.
Not unique to South Florida in the US, the influx of new residents to this region is putting increasing pressure on affordable housing.
“In order to solve this serious problem, effective solutions and manpower are needed,” something that “represents an opportunity for the public and private sectors to work together,” said Tere Blanca, founder of Blanca Commercial Real Estate.
Blanca, like Bittel, warned of a possible “recession for next year”, with a “construction stoppage” due to the rise in interest rates and “increased construction costs”.
In a probable scenario for 2023, experts agree that buyers and sellers will find a “more stable market” with “better financing conditions and a slight increase in inventory” of housing.
While Wollmann cited Miami, Palm Beach and Broward, as well as Orlando and Tampa, as the areas of South Florida that most appeal to buyers, Tomas Sulichin, president of the Commercial Division of Related ISG Realty, noted that the North Miami, Hallandale Beach, Hollywood and Little Havana “will be in the spotlight as the major metropolises become overcrowded.”
Craig Studnicky, CEO of the firm ISG World, finds it unlikely that the recession will affect the real estate sector in South Florida in 2023, which is driven by “the constant influx of new residents” and companies.
INFLUX OF THOUSANDS OF NEW RESIDENTS TO SOUTH FLORIDA
In 2021, 122 companies moved their headquarters to Miami or opened offices in this coastal city, resulting in the arrival of thousands of new residents looking for housing, “a trend that is likely to continue in 2023,” Studnicky said.
Experts agree that the market is showing no signs of cooling off, despite rising mortgage rates. Home prices aren’t going down, especially since the population in South Florida continues to grow so fast and fast.
In the opinion of Michael Taylor, president of the construction company Current Builders, Florida “will continue to be a real estate hot spot” in 2023, with a sector that “has been booming since the pandemic” and that “will not experience a slowdown” at the rate of other US states
“High demand continues, as does the influx of new residents” to the state of Florida, “the opposite of what is happening nationally,” Taylor said.