Over the last five years, condo prices in downtown Miami have experienced annual double-digit increases, that is until this year. In the first six months of 2016, they’ve actually dipped 4%, according to a recent article from Crain’s Miami, a move that has many developers shifting their attention to rental apartments. Real estate analyst Anthony Graziano predicts that the rental market will actually grow by 30% over the course of this year.
“As the market slows, developers who already have a piece of land entitled and were planning on doing a condominium have to investigate doing rentals,” stated Graziano, senior managing director of Integra Realty Resources, a commercial real estate consulting firm.
Earlier this year, Integra submitted a report for the Miami DDA, revealing that a possible 12,765 rental apartments have been proposed or are currently under construction in the area. Well known developers like Melo Group and 13th Floor Investments have already started to capitalize on the situation, constructing well received multi-family housing.
“With employment growth downtown, there’s desire to be in an urban environment,” added Graziano, “and if you’re looking at the pattern, I don’t think there’s anyone new multi-family development product that isn’t either in the center of downtown or within one mile of the Metrorail.”
Location and affordability seem to be the driving forces of the market shift. Not only is renting more affordable for most millennials and middle-class workers, but with Miami’s growing population, public transit will become a critical component in the years ahead.
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