Even among South Florida’s most respected, down-in-the-trenches experts, there’s disagreement about what’s hot, what’s not and what’s next for Miami real estate.
Is now the time to buy or sell? Are more people buying or renting? Have Miami-Dade County’s hottest neighborhoods hit peak value or do they still have more room to grow? Is Miami real estate trapped in yet another bubble?
The Miami Herald and partner Bendixen & Amandi International, a Miami-based polling firm, posed these questions and more to 105 top real estate professionals in a telephone survey. Participants were assured their answers would not be associated with their names in reports to the public or to the Miami Herald.
“We got very candid comments,” said Fernand Amandi, a principal at Bendixen, “That was our hope: To be able to get to what these industry watchers were really thinking and feeling.”
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You can read the full results of the survey here.
Amandi said that the diversity of opinions revealed in the Bendixen & Amandi/Miami Herald real estate poll shows “that there’s a range of opportunity in real estate throughout the whole county, depending on your price point.”
For example, those polled were pretty much evenly split about whether Miami today is a buyer’s or seller’s market.
“The market is very hot right now. People are paying high prices and want to have a presence in Miami,” said one industry watcher who came down on the sell side.
“Buy if you want to use it long-term. Now is not a good time to speculate,” said another who urged buyers to act now — if they’re in it for the right reasons.
With more supply on the market — mainly luxury condo units — the insatiable demand of the last few years is now being met.
“The buildings aren’t selling out in five minutes anymore because there’s the same number of buyers for more projects,” said Gil Dezer, president of Dezer Development. “It’s not a normal or stable market when the units are going that fast.”
Dezer participated in the poll but also agreed to be interviewed on the record.
The higher inventory means a housing market known for its unpredictable swings has finally entered a period of stability.
Home values— up 40 percent since 2012 — slowed their pace of growth to eight percent in 2014, down from 16 percent growth the year before.
In terms of value, the poll also revealed a disconnect between where people want to buy and which areas experts think are overvalued.
There was no question that Miami Beach and Brickell are today’s hottest neighborhoods, according to the survey. But both neighborhoods were also chosen as Miami’s most overvalued and the places that experts would avoid buying in altogether.
“The traffic is crazy [in Miami Beach] and the water could rise. … I really don’t know if it’s worth it,” said one person polled.
“[Brickell] has approached New York values,” another added.
Only Miami’s downtown made the top three for both hottest neighborhood and most undervalued.
“Major real estate transactions have been taking place [in the downtown],” said one source. “The area will soon see a renaissance. The prices do not reflect that.”
Another result from the poll that jumped out: Buyers want homes within walking distance of restaurants and shops — a neighborhood amenity that historically hasn’t registered in car-centric Miami, said Ron Shuffield, another poll participant and president of EWM Realty International. “Walkability” registered as the number two most important amenity, not far behind the quality of local schools.
“People do make their home-buying decisions based on the traffic and based on what kind of entertainment and conveniences are within easy walking distance,” Shuffield said. “ It’s changing the decision of people about where they live.”
And as developers look for affordable land, neighborhoods that would have barely been on brokers’ maps just a few years ago are now heating up. North Miami, Edgewater, Little Havana, the Upper East Side, Little River and Doral all made the list of markets to watch.
But some of those polled worried that the new real estate boom is leaving locals behind.
“There is very little new construction being built at price points that South Floridians could afford,” said one respondent. “The price points are out of reach for 90% of South Floridians. The target is foreign and out-of-town buyers.”
That leaves many locals stuck in rentals, which are increasingly expensive, even though 68 percent of those polled said it’s better to buy in the current market.
There are other potential obstacles on the road ahead.
“Demand grew, and so did construction and land prices,” said Jorge Pérez , chairman of the Related Group, in an email. “Finding skilled labor became more challenging as construction of new condo projects multiplied.”
And a whopping 97 percent of those surveyed answered “Yes” to the question: “Is the political and financial instability around the world in places like Latin America and Europe having a significant impact on the Miami-Dade residential market?”
Russian buyers, for one, have disappeared from the scene almost completely.
And while many of those polled said they expected more Latin American buyers to enter Miami’s market looking for a safe investment, there was also an acknowledgment that some foreigners might find prices less appealing as their currencies decline against the dollar.
“Instead of buying Bentleys, these foreign buyers are going to be buying Mercedes,” said Peter Zalewski, a South Florida condo analyst who participated in the poll and also spoke on the record. “It’s still good quality, but it doesn’t ring the cash register the same way it did two or three years ago.”
Foreign buyers overwhelmingly make their purchases in cash, and those sales have declined over the last year in Miami-Dade County, falling from 63.3 percent of all transactions to 59.3 percent, according to the property analytics firm CoreLogic.
Because luxury units are unaffordable to most locals, the market will have to depend on domestic, out-of-town buyers to fill the gap left by foreigners.
That’s not happening yet. Only 16 percent of those polled said they see more domestic buyers than foreigners.
But in 2014 the domestic, out-of-town buyer — traditionally, a unicorn in Miami, something often spoken of but never seen — finally made a mark, those polled agreed.
“Domestic buyers who are globally aware understand that our prices are still undervalued compared to other markets,” Shuffield said.
Urban apartments in Miami Beach traded for an average of $760 per square foot and in Miami for $446 per square foot last year, according to research conducted by EWM and Christie’s International Real Estate. Compare that to square-foot prices in London ($2,964), New York ($1,719), Paris ($1,533), Moscow ($1,334) and Toronto ($770).
And there’s no question where Miami’s out-of-town buyers are coming from, according to the poll: New York.
Terry Blumer, who lives in Westchester, New York, purchased a lot in Coral Gables earlier this year. He plans to build a new home on it, one that will become his primary residence.
“I looked at a variety of cities around the country,” said Blumer, a retired private equity investor. “But Miami was the only one that both had a resort feel and was also a full-time city with museums, restaurants and nightlife, and a pool of professional, talented and successful people.”
And the prices, Blumer added, were much more reasonable than in New York City.
They look to stay that way.
Even though Miami’s market is stabilizing, nearly 70 percent of the industry professionals polled said they thought residential home values would continue to rise over the next year, just at a slower rate. As for the ever-present question of whether Miami real estate is in another of its notorious bubbles, 72 percent said no.
The poll also asked real estate watchers to name their choices for best local brokerage, best local realtor and most knowledgeable person in the industry.
The winners were EWM Realty International for best brokerage, Jill Hertzberg of Coldwell Banker for best realtor and Jorge Pérez of the Related Group for most knowledgeable person.
How we did it
The Miami Herald wanted to find out what top industry players really think about where Miami’s real estate market is going.
To that end, the Herald partnered with locally based polling firm Bendixen & Amandi International to conduct an anonymous survey of 105 major developers, brokers and other industry watchers. The arrangement created an opportunity for South Florida’s most knowledgeable sources to speak freely, without the usual pressure of pitching buyers and making sales.
The survey was conducted as a wide-ranging, one-on-one conversation between source and pollster that allowed for open-ended answers, said Anthony Williams, who led the effort for Bendixen & Amandi.
The Herald and Bendixen & Amandi together devised a list of top industry players. Herald writers and editors were given only aggregate results; quotes were not identified by individual to ensure honest responses.
Best of the best
As part of the Bendixen & Amandi/Miami Herald real estate poll, we asked top industry watchers to name the professionals they would choose to buy or sell their homes if they could not use their own companies. They also were asked to name the single most knowledgeable person in the business. The results:
EWM Realty International
Jill Hertzberg of Coldwell Banker
Jorge Pérez of the Related Group