A hypothesis is being bantered around high-level real estate circles that South Florida — a region with a long history of volatility typically triggered by domestic and foreign speculators — may have experienced its last dramatic boom-and-bust cycle.
Miami’s evolution, proponents contend, into an international center for business, arts, education and recreation, combined with a significant public investment in cultural facilities and transportation infrastructure in the last two decades has put South Florida on a path to attract a steady infusion of individual and corporate dollars from around the world for the long-term future.
Proponents credit the decade-long run of the Art Basel event that brings together some of the world’s top artists and collectors every December for exhibits, discussions and social events as the linchpin that introduced the globe’s most elite circles — with excessive investment dollars — to Miami.
This anticipated infusion of international capital, especially for real estate, is considered to be a sort of elixir that could ultimately inoculate South Florida against future real estate volatility.
Proponents refuse to say that prices will not go down in the future in South Florida, but rather that the market would be backstopped by wealthy investors with the capital to deter many of the dramatic swings of the past.
For many South Floridians who suffered through the 2007 market crash, the immediate reaction is to simply disavow the idea as optimistic hyperbole being pitched by developers or real estate professionals looking for business.
After all, South Florida has a long history of real estate booms and busts dating back to at least the 1920s.
Despite shrinking residential inventory in recent quarters, some could argue the tricounty region of Miami-Dade, Broward and Palm Beach — saddled by an unknown amount of shadow distressed real estate — is still in the midst of a bust that began in 2007 after four years of rampant residential development and condo conversions.
Proponents counter that South Florida has experienced a somewhat quick recovery — despite a difficult mortgage market — from a real estate crash that many projected would take a decade to recover from given the oversupply of new and resale residences available some six years ago.
As of the first quarter of 2013, South Florida’s resale inventory represents about 30 percent of the nearly 110,000 single-family houses, condos and townhouses on the market back in the fourth quarter of 2008, according to data from the Southeast Florida MLXchange.
As for the oversupply of new condo units, buyers — primarily from overseas with strong currencies — have acquired about 95 percent of the nearly 49,000 new condos created in South Florida’s seven largest coastal markets from Greater Downtown Miami to Downtown Fort Lauderdale to Downtown West Palm Beach.
With boom-era developer condo inventory on pace to sell out in early 2014, developers are now proposing more than 120 condo towers with nearly 16,400 units — some designed by world-class architects — for South Florida’s coastal region.
Nearly 40 percent of the planned condo units in South Florida are being proposed by developers who come from outside of South Florida from places ranging from New Jersey to California, Argentina to Canada, and Brazil to Malaysia.