The chart illustrates the dynamic changes in the average selling price of industrial property in Miami-Dade since 2019 Q4, a date just prior to the onset of COVID, with each data point scaled relative to the baseline value of 1.00 at the end of 2019. Several notable trends and patterns emerge from the dataset.
In the early stages of the dataset, from 2019 Q4 to 2020 Q3, there seems to be a gradual decline in the average selling price, reaching its lowest point of 0.91 in 2020 Q3. This period likely reflects the initial impacts of the COVID-19 pandemic on the real estate market, with economic uncertainties influencing property prices. At that time, it seemed everyone was anxious about what the shutdown would mean for the economy overall and thus commercial real estate. I had a few calls from buyers asking for any distressed deals that arose, convinced that severe issues were just around the corner, and recall multiple buyers being agitated because my sellers would not respond to their well below asking price offers. The consensus was almost completely “uh-oh;” there was really nobody thinking “here we go” in an optimistic sense. For brokers, the phones stopped ringing.
However, starting from 2020 Q4, there is a noticeable rebound, and the average selling price experiences an upward trajectory. The rebound continues through 2021, with substantial increases in 2021 Q1, reaching 1.37, and 2021 Q4, reaching 1.52. This suggests a recovery and potential resilience in the industrial property market as economic conditions stabilize / heat up.
The year 2022 shows further fluctuations but generally maintains an upward trend. Notably, 2022 Q2 sees a significant spike with a scaled price of 1.75, indicating a notable surge in the average selling price during that quarter. Never underestimate the power of The Fed.
As we move into 2023, the dataset continues to depict volatility, with peaks and troughs in subsequent quarters. The scaled price reaches its highest point of 2.09 in 2023 Q1, underlining a potential period of robust growth. However, by 2023 Q4, there is a slight dip, emphasizing the dynamic nature of the real estate market and perhaps a bit of data noise. Prices appear to be moving around a range approaching double what they were pre-COVID. Higher financing costs have no doubt have slowed the price increases.
In the most recent data point, 2024 Q1 QTD, the scaled price stands at 1.94, perhaps showcasing a continuation of positive momentum in the early days of the year, though more likely only a reflection of limited data that happens to be on the high side. Overall, the full dataset suggests a resilient industrial property market in Miami-Dade, characterized by fluctuations influenced by external factors such as the COVID-19 pandemic and broader economic conditions.
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