Will real estate prices continue to climb? Experts offer predictions for 2020
Will 2020 bring a buyer’s market to Miami residential real estate? What is the next hot office market? Will online shopping grow, bringing more demand for warehouses needed to store those goods?
Here’s what the experts have to say:
Office
▪ Steven Hurwitz, managing director specializing in office real estate brokerage, JLL:
“Our markets are cyclical. We’ve had rents grow and so people expect rents to not to grow as much [...] We’re seeing an increase in financial services, including hedge funds, that are fleeing the northeast for beneficial tax cuts. There’s been a huge increase in that type of tenant moving down here.”
▪ Stephen Rutchik, executive managing director of office services, Colliers International South Florida:
“There will be more leasing activity going into Downtown Fort Lauderdale, Brickell and Downtown Miami. For every tenant that we see that leaves Brickell, there’s more than one new-to-market or that’s expanding that takes the real estate. [And] Wynwood has yet to fully emerge as an office market. Tenants haven’t gone to Wynwood in mass because there hasn’t been an office market. But in 2020, Wynwood will emerge as a strong office market.”
Residential
▪ Danny Hertzberg, sales associate, of The Jills Zeder Group, an affiliate of Coldwell Banker Residential Real Estate:
“The domestic buyers from the northeast and California are more focused on sea level rise. They buy more new construction because of the higher elevations. We expect to see this continue [...] I [also] expect in Sunny Isles, Downtown Miami and Brickell for there to be a pull back in pricing in the first six months. These are the areas with the biggest challenge in inventory.”
▪ Mike Pappas, president and CEO, Keyes Company
“I think it will be a stronger year for luxury condo and single-family home sales than this year. We’ve seen a strong pick-up in the northeast buyer in the third and fourth quarters. The state and local tax deductions, SALT, will play a in favor to Florida. [And] sellers are making adjustments in prices. You’re seeing price breaks and that bodes well for buyers.”
▪ Ron Shuffield, president and CEO, Berkshire Hathaway HomeServices EWM Realty
“We are ending 2019 with good activity in the luxury condo and single-family market and we expect this activity to continue into 2020. The increase in sales is fueled by sellers appropriately pricing their single-family home or condo.”
▪ Rose Sklar, team leader of The Sklar Team, affiliated with Coldwell Banker Residential Real Estate
“What’s doing better in Broward is the $1 million- to $2 million market. The prices are coming down for any single-family homes in Broward that are over 20 years old. There’s an oversupply of big houses. The millennial buyers, the biggest buyer pool, they don’t want to pay for bigger homes because of student debt and because they are deciding to have families later in life.”
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Retail
▪ Miguel A. Pinto, president and managing broker, Apex Capital Realty
“Developers and landlords are aware and keen on having their property be competitive to what the market can absorb in terms of rents, therefore I see rents throughout the market remaining stable. There were close to 900,000 square feet that were delivered this year, plus another 2.6 million square feet planned or under construction. This means that there will be a lot of vacancy until the new inventory gets absorbed and you will see landlords give numerous concessions to get the quality tenants into their properties.”
▪ Dave Preston, executive managing director of retail, Colliers International South Florida
“We believe we’ll see activity on high street areas. Real estate prices have lowered. We’ll see more activity. We’ll [especially] see a little more activity on Lincoln Road. We are going to see some of the effects of the James Corner plan. When we get closer to construction, retail activity is going to be picking up.”
Industrial
▪ Ed Easton, chairman, Easton Group:
“The industrial market will continue to lead all other sectors. Industrial out-performed expectations in 2019 as the absorption of existing big-box warehouses and new construction were stronger than anticipated. The demand continues to be fueled by e-commerce, which now represents about a quarter of all industrial tenants in the market. Vacancy is less than 4 percent and rental rates should increase another 8 percent, continuing strong momentum into 2020. The price per-square-foot on sales should also continue an upward trajectory.”
▪ Sky Groden, managing director specializing in industrial real estate brokerage, JLL:
“Broward’s industrial market remains fundamentally strong, with numerous new warehouse spaces under construction that total over 2.5 million square feet — the most new construction out of the three counties — especially in southwest and northeast Broward. This level of development is essential for the market to meet pent-up demand and will surely keep rental rates on the rise into the new year. Meanwhile in Miami-Dade, demand in some of the county’s most sought-after sub-markets is beginning to cool down, though the market continues to experience larger-than-life deals and we anticipate for this to transfer over next year.”
