Page 5

Inventory and Sales Miami-Dade County 2002 - 2012

BURNING QUESTION 1:

25,000

“Is this just another Real Estate Bubble?”, “With prices increasing so rapidly, are we not destined to another Market Collapse?”

20,000

Answer: Real estate is a cyclical business and like any other industry or market, it goes through periods of contractions and expansions. As a realtor I cannot tell you what will happen in 5 years but I can give you some market facts that will give you more insight into the Real Estate cycle. Like any other market the real estate market is never in equilibrium and will fluctuate between excess inventory and shortfalls in inventory due to changes in demand and supply of real estate.

UNITS

15,000

10,000

5,000

0 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Condos For Sale on 12/31

Historic Condo Sales Prices/Sq.Ft

$500 $450

$462 $434

$400 $350

$303

$250

$338

$257

Q4 2005 Condos For Sale 12/31 Condo Sold Annually Months of Supply on 12/31

Low

Moderate/volatile

Short, Medium & Long Term

Low

Moderate

Short, Medium & Long Term

Volatile

Long Term

Volatile

Long Term

Q4 2008

Q4 2012

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 6475 6260 5259 9643 19875 23517 22637 16169 15117 8651 7175 12204 12872 13897 15260 11932 7592 6731 10681 14161 17533 17361 5 5.9 12.8 18.2 40.4 37.2 20 7.6 4.5 5.8 6.4

Data taken from EWM Trendgraphics. Originally derived from the Florida tax rolls and MLS data combined. INVESTORS GUIDE 2013

Downtown Miami

Medium

TIMELINE

Midtown

Medium

Brickell

4 Downtown $0 5 Midtown & Design District

Short, Medium & Long Term

Midtown

Midtown

2 Financial District $100 3 Brickell Key $50

Low

RETURN $213 ON INVESTMENT Moderate

Brickell

1 Historic Brickell $150

Brickell

RISK

Downtown Miami

$200

5

Brickell and Downtown has not only attracted investors but big businesses as it becomes the ‘business hub’ for Latin America. As the population has boomed so rental rates have increased dramatically further fueling the demand for property that provides a much healthier return than other investment mechanisms.

$375

$344

$334

Downtown Miami

$300

2012

Condos Sold Annually

Demand for real estate in Miami in the last 2 years literally exploded. Originally it was buyers looking to take obvious advantage of units selling below construction cost. In the last year demand for real estate has continued as Miami Condos are still seen to provide excellent value to buyers from the America’s market: Brazil, Argentina, Mexico looking to invest in US property as well as many from mainland Europe and the rest of the US.

Interestingly as the mortgage market tightened its lending parameters, so a large majority of buyers have been all or mostly cash. New projects have required 40-50% down as opposed to the previous market conditions of 2004 - 2007 where buyers were heavily relying on large mortgages to make purchases. Combined with stronger infrastructural, social and businss developments in Brickell and Downtown this has resulted in a much more robust property market.

The importance of Inventory Market prices stabilize when inventory hold between 6 – 9 months of supply. Current inventory supplies are now just below 5 months. Such a current short fall of inventory can only result in an increase to residential property prices. DAVID SIDDONS GROUP, EWM REALTY INTERNATIONAL

Investors Guide to Brickell and Downtown Miami 2013  

A complete investors guide to buying real estate in Brickell and Downtown Miami. A look back on changes December 2011- December 2012

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