ROUND TABLE Miami Words | John Howell
Miami Heat Miami was among the first
places in the US to feel the full impact of the the financial crisis and it is one of the first to power out of it. Why? What have they got that’s so special? What can we learn from them? We invited the cream of Miami’s real estate industry for lunch to find out
O 24
ur Round Table coincided with the news that the Case-Schiller index of
US house prices had reached its highest level in seven years, that US unemployment had fallen below 7.5% for the first time in five years and that the Miami Heat – the local basketball team – looked set to win the NBA champions for the third straight year. So it was, perhaps, not surprising that our guests were
unmistakeably upbeat. There is no denying the success story that is Miami. Huge development projects – billions of dollars worth – already underway and others in the final stages of preparation. Expansion of the port. Extensions to the metro system. House prices rising and inventory falling. Net immigration from other parts of the US and overseas alike. Even the iconic Art Deco
properties in South Beach are being impressively upgraded from one end of the beach to the other. Just three years ago, buyers with cash could snap up new apartments in Brickell Avenue – Miami’s glitzy commercial district – for 30 or 40 cents on the dollar, i.e. paying just 30-40% of 2006 prices. Today, prices in prime Miami are nearly back at 2006 levels. Many, especially in the luxury sector, are higher. On the day of our lunch the Miami Herald reported: “The latest report from the Case-Shiller real estate index has property values up 11% from a year earlier. “The March index reading was also the 15th consecutive monthly gain, the longest streak since an 82-month run of increases ended in May 2006.”
What has caused this? Why Miami? Where will it go from here? Is there still scope for your clients to invest in Miami or have they already missed the boat?
First, we looked at the bad times. Why had Miami been hurt so badly? There was broad agreement. “‘No money down’ deals and investment frenzy turned the market into pure speculation – and speculation with other people’s money,” said Pete Mendez. “When the crash came they could just walk away,
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