With foreign buyers flooding Miami’s shores in search of luxury condos in which to park their cash, the city’s real estate market has come to bear more than a passing resemblance to Manhattan’s. Cranes once again punctuate a cityscape that was pocked, post-recession, by empty condo towers. Prices are nudging their boom-era peaks and luxury retailers are flocking to neighborhoods described very recently as “gritty.”
Miami’s turnaround is made all the more stunning by the fact that the housing market was severely weakened during the financial collapse (unlike Manhattan’s, which barely flinched). By the beginning of 2014, Miami’s prices had reached their highest levels since 2008—the average sales price soared to $461,374—and the time that properties spent on the market fell to an eight-year low, according to a Douglas Elliman report. Nearly all of the inventory from the last condo boom—some 22,200 units—has been absorbed and another 12,000 to 15,000 units are pre-sold or under construction downtown, reports Ron Shuffield, the president of EWM Realty International in Miami. So what’s driving the new boom?
A Good Investment, for both Foreign and Domestic Buyers
First and foremost, brokers and developers say that buyers are flocking to Miami because it’s relatively cheap. “We’re still a bargain compared with other cities in the international market—London, Paris, Shanghai, New York,” says Ugo Colombo, the founder of developer CMC Group. Shuffield notes that you can almost buy three condos in Miami for the price of one in New York City. “It’s one of the few cities in the country, and even the world, that really benefits from a global economy,” says Dennis Carvajal, a broker with Sotheby’s International Realty.
One added bonus: There’s no state or city income tax, a perk that draws domestic buyers in addition to international ones. Developer David Martin, president and co-owner of the Terra Group, says that domestic buyers have returned to the market in a big way; he’s now doing two projects in Coconut Grove in which 60 percent of the buyers are local.
A Burgeoning Arts and Culture Scene
It’s hard to overstate the importance of Miami’s cultural life in attracting buyers. Thanks to Art Basel, which brings together many of the world’s wealthiest people and its biggest cultural influencers, the city has caught the eye of not just those with vast quantities of money to spend, but also the kinds of artists and tastemakers those people want to be associated with. Nor has the bevy of newly opened museums and cultural venues gone unnoticed, among them the Adrienne Arsht Center for the Performing Arts, the new Perez Art Museum, the New World Center concert hall and the Patricia and Philip Frost Museum of Science, which is slated to open in 2015.
These cultural offerings give Miami depth—it’s not just another pretty vacation destination with great weather and attractive condos. Instead, it’s seen as the kind of place where people actually want to live year-round (regardless of whether or not they do). “I think it’s always been a very sexy city, but only recently has it become a destination for the arts,” Carvajal says.
