A strong U.S. economy managed by a developer-turned-president has South Florida’s real estate community cautiously optimistic for 2017, according to a survey of top industry professionals released Wednesday by law firm Berger Singerman.
About 53 percent of respondents said they expect the local real estate market this year to be “much better” or “somewhat better” than 2016, compared to 47 percent who said it would be “the same” or “somewhat worse.” In last year’s survey, the roles were reversed, with 49 percent expecting a positive performance and 50 percent predicting a neutral or negative showing.
As it turned out, the bears had a point. Residential sales and prices, especially in the luxury condo market, plummeted for much of 2016, after hitting record highs in some areas. Downtown developers were once again guilty of overbuilding, although not the extent of the pre-recession housing bubble. And a strong dollar and economic instability in Latin America starved a pricey market that depends on overseas buyers.
53Percentage of survey respondents who expect 2017 will be “much better” or “somewhat better” than 2016 for South Florida real estate
But the election of Donald Trump, combined with a growing domestic economy, is helping restore confidence.
Asked their primary reason for optimism in 2017, 32 percent of respondents said improvement in the economy and 28 percent named the results of the presidential election.
New construction condo projects reported better sales in December after months of pre-election doldrums.
“It blew me away that so many people view Trump coming into office as a reason the U.S. will continue to look pretty on the world stage,” said Marc Shuster, a partner at Berger Singerman. “But he is a real estate guy.”
While the condo and retail markets (which are both seeing booms in construction) are expected to see lower growth in 2017, respondents said they expect big returns for warehouse/industrial, multi-family and hotel/hospitality development.
There could be some soft spots, but the overall takeaway is that it’s a good time to be in real estate in South Florida.
Barry Lapides, Berger Singerman
In the absence of dependable luxe condo sales, developers are turning their attention to under-valued neighborhoods in Little Haiti, Little Havana and Overtown, leading to fears of gentrification among some locals.
The survey also noted problems the hotel industry will face in 2017: the twin threat of home-sharing platforms like Airbnb and the potential return of Zika. About 57 percent of respondents named the sharing economy as the biggest threat to hotels while 32 percent chose Zika.
“There could be some soft spots, but the overall takeaway is that it’s a good time to be in real estate in South Florida,” said Barry Lapides of Berger Singerman.
Despite the 2016 slowdown, South Florida did see major deals struck, including a record $517 million sale of downtown Miami’s iconic Southeast Financial Center.
Miami-based Berger Singerman polled about 100 South Florida developers, brokers, lenders, investors, architects and attorneys in November and December for the survey.