The Q2 2015 update of the Residential Real Estate Market Study of the Miami Downtown Development Authority has been released . This is a a continuation of their Q1 2015 (Annual) market research report. Some of their findings in this most recent report include:
- Units under construction have declined 6% due to formerly under construction projects having been delivered.
- 153 Additional units have been moved into the contracts stage of development.
- New product (pre-sale) pricing has stabilized with most sales offices reporting similar-to-lower levels
of sales traffic and velocity. The lower sales velocity is expected as the majority of larger projects
(200+ units) have pre-sold well in 2014 and do not have high levels of inventory remaining. - Existing condo pricing did not increase in the prior from January to May of this year (2015). Price increased have slowed.
- The marketability of condos in Edgewater that are not waterfront is not proven at the necessary pricing.
- The first cancelled project of this development cycle has been realized with the cancellation of Ion at Edgewater.
- Following a land pricing spike in H2 2014, land transactions have slowed.
- After 5% and 8% increased in the prior 2012-2013 and 2013-2014 periods, respective, conventional rental rates have remained level so far in 2015 as new condo projects are being completed and listed as part of rental
inventory. - Rental rate growth is anticipated to be constrained through 2017 as more condo projects are completed
and delivered into rental inventory. - Condo inventory is successfully leasing at $2.41 per square foot per month for 2 bedroom units to over $3.07 per square foot per month for studios, while conventional rental properties remain more affordable at $1.59 per square foot per month for 3 bedrooms to $2.70 per square foot per month for studio units.
- 3,715 Units within conventional rental projects are under construction within (9) downtown
projects against an existing inventory of around 2,500 units. The is anticipated to place downward pressure on rent growth into next year. - Continued increases in land pricing and construction costs are beginning to temper developer enthusiasm as their margins have been squeezed.
- More new condo deliveries are occurring this year (2015) than last
- The market has experienced two years in a row of over 20% price appreciation
- A large pipeline of conventional rental inventory is currently under construction
- Land and construction costs have escalated.
- The convergence of factors above is affecting rental growth expectations and in turn pre-construction price growth of condo units.
Some useful resources related to this Miami Downtown Development Authority (DDA) report include demographic and economic data and projections for the zip codes 33130 and 33131 in the central business district, commercial real estate listings in the same zip codes 33130 and 33131, and updated Miami office property trend charts.