We asked top developers in Miami what they see happening in the real estate market in 2015. Here’s what they had to say:
Ronald Krongold, CEO of Gold Krown Financial:
“I think in 2015, [the market] is going to slow down. A six-month supply is normal. When you start to reach seven, eight, nine month supplies, that’s way too long because there are so many units and they’re so high-priced. The economies where most people are buying from are not doing well. Although there won’t be a crash, I think it’s going to level out”.
Nitin Motwani, managing principal with Miami Worldcenter Associates:
“The best-positioned projects heading into 2015 will be those with strong sponsors and an active sales and marketing infrastructure up and running. Properties offering a unique experience or location are also in high demand. We launched sales for Paramount Miami Worldcenter within the past month and have already experienced a flood of buyer interest, thanks largely to our location within a mixed-use development in the heart of downtown Miami”.
Don Peebles, CEO of The Peebles Corporation:
“You’re going to see continued strength and growth on the luxury condo side. You’ll see a significant increase of development projects focused on rental housing on the luxury side and on the workforce side. The gap between the cost of ownership and the cost of rent will become much narrower. The motivation behind purchasing condos before was not for the purpose of a return — it was for the preservation of capital. Now those buyers are becoming more sophisticated. You’ll see Miami evolve from being a one-dimensional real estate market. Once you get off of Miami Beach, the world of development when it comes to rentals gets more crowded”.
Jacob Roffman, principal at 13th Floor Investments:
“Millennials and international investors will continue shaping the Miami residential market in 2015. The desire of young professionals to live in areas with proximity to mass transit has seen investors respond with an unprecedented level of development in and around the urban core. We’ve seen this firsthand at our sold-out 1010 Brickell project, and we expect similar interest in our multifamily development project with the Adler Group, which breaks ground next year and is located directly adjacent to the Dadeland North Metrorail Station. ‘Special’ projects by well-established developers will prevail, as foreign demand for for-sale product moderates due to increased difficulties in moving capital out of foreign countries”.
Tom Roth, principal at Grass River Property:
“We are bullish on the Miami real estate market at Grass River Property. From an investment standpoint, Miami has never been stronger. We are one of a few top U.S. markets that appeals to major onshore institutional investors, private equity and international investors alike. We continue to attract Latin Americans in big numbers looking to find a home for flight capital and a safe place to live. Europeans choose Miami for lower taxes and better climate. Northeasterners are looking to Miami for no state taxes, better climate and an emerging urban lifestyle. South Florida’s suburban audiences are attracted to the city for the variety of residential options and vibrant lifestyle, neither of which were trademarks of Miami in years past. In 2015, this demand will have the greatest impact on our residential, retail and office markets”.
These interviews have been edited and condensed for clarity.
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