Regions
Southeast | Miami
Jun 29, 2009
By: Barbra Murray, Contributing Editor
Rumors of the Downtown Miami condominium market's death have been greatly exaggerated. The Miami Downtown Development Authority recently commissioned the Residential Closings & Occupancy Study, which indicates that industry talk about the area's stock of new condos being covered in cobwebs--or predominantly empty--may not be totally accurate.
"We're not sitting on a bunch of buildings; that's a myth, it is not the reality," Robert Geitner, senior manager for marketing and communications with the Miami DDA, told CPN. DDA turned to Independent research firm Goodkin Consulting/Focus Real Estate Advisors to perform the study. The firm looked at occupancy and closing rates at 73 condominium properties and seven rental apartment properties that have hit the market within the last six years, and concluded that 62 percent of the aggregate 22,959 residences are occupied by owners and renters. Completed sales among the 21,616 condo residences examined account for 15,337 units, of which 98.6 percent are currently occupied. The numbers indicate a shift in the market make-up as, according to the research, renters traditionally account for 70 percent of Downtown Miami's residential population.
Areas that overbuilt when demand was high and loans were free flowing--like Las Vegas--are suffering the worst as the credit crunch, the struggling economy and widespread job losses continue to plague the home ownership market. Downtown Miami has been grouped together with that bunch. "When the climate is right to build, you build, and it was right for five years," Geitner explained. "But we didn't build in a suburban environment; we built in an urban environment and there's a lifestyle here that you can't get anywhere else in Miami, so we're trending positive."
Additionally, Downtown Miami appears to have found a silver lining. "The failure of the economy has sort of helped because values fell and downtown Miami has become more affordable, so it's seen as a doable thing," he said. "You don't have to be extremely well-positioned financially to move downtown." New college graduates and those with jobs in the area are among the groups that have grown increasingly attracted to downtown. And with the new crowd comes new accommodations, which keeps the cycle going. "The residents are driving new businesses to open, so we're adding jobs at a time when the economy is not doing well. And people are drawn to things other people are attracted to. The new restaurants and shops create a buzz and that creates more demand. This is a much different environment than downtown has had for years. It's like a small city being built within a city."
Even the 1,245 units that are scheduled to come online this year with the completion of four condominium projects are not expected to impede the progress of Downtown Miami's condo market. "Anything under construction will be done in 12 months, and there are no new projects coming, so we have an end to the inventory," Geitner noted. "The inventory is going to be absorbed sooner, rather than later." The optimism comes even in the face of the ongoing credit crisis. "Closings are still really health on units given what's going on. In spite of all these things, we're at 62 percent occupancy. So as financing obstacles fall away, we can only trend better."
As the city's expanding population becomes increasingly seduced by Downtown Miami's burgeoning new urban environment, Geitner anticipates that the positive trend in the condo market will grow stronger with the recovery of the economy. "Miami is going to come out roaring. When the economy stabilizes, it's just going to bust out. Right now, we want people to know that what they think is going on in downtown Miami's condo market, isn't going on."
By: Barbra Murray, Contributing Editor
Rumors of the Downtown Miami condominium market's death have been greatly exaggerated. The Miami Downtown Development Authority recently commissioned the Residential Closings & Occupancy Study, which indicates that industry talk about the area's stock of new condos being covered in cobwebs--or predominantly empty--may not be totally accurate.
"We're not sitting on a bunch of buildings; that's a myth, it is not the reality," Robert Geitner, senior manager for marketing and communications with the Miami DDA, told CPN. DDA turned to Independent research firm Goodkin Consulting/Focus Real Estate Advisors to perform the study. The firm looked at occupancy and closing rates at 73 condominium properties and seven rental apartment properties that have hit the market within the last six years, and concluded that 62 percent of the aggregate 22,959 residences are occupied by owners and renters. Completed sales among the 21,616 condo residences examined account for 15,337 units, of which 98.6 percent are currently occupied. The numbers indicate a shift in the market make-up as, according to the research, renters traditionally account for 70 percent of Downtown Miami's residential population.
Areas that overbuilt when demand was high and loans were free flowing--like Las Vegas--are suffering the worst as the credit crunch, the struggling economy and widespread job losses continue to plague the home ownership market. Downtown Miami has been grouped together with that bunch. "When the climate is right to build, you build, and it was right for five years," Geitner explained. "But we didn't build in a suburban environment; we built in an urban environment and there's a lifestyle here that you can't get anywhere else in Miami, so we're trending positive."
Additionally, Downtown Miami appears to have found a silver lining. "The failure of the economy has sort of helped because values fell and downtown Miami has become more affordable, so it's seen as a doable thing," he said. "You don't have to be extremely well-positioned financially to move downtown." New college graduates and those with jobs in the area are among the groups that have grown increasingly attracted to downtown. And with the new crowd comes new accommodations, which keeps the cycle going. "The residents are driving new businesses to open, so we're adding jobs at a time when the economy is not doing well. And people are drawn to things other people are attracted to. The new restaurants and shops create a buzz and that creates more demand. This is a much different environment than downtown has had for years. It's like a small city being built within a city."
Even the 1,245 units that are scheduled to come online this year with the completion of four condominium projects are not expected to impede the progress of Downtown Miami's condo market. "Anything under construction will be done in 12 months, and there are no new projects coming, so we have an end to the inventory," Geitner noted. "The inventory is going to be absorbed sooner, rather than later." The optimism comes even in the face of the ongoing credit crisis. "Closings are still really health on units given what's going on. In spite of all these things, we're at 62 percent occupancy. So as financing obstacles fall away, we can only trend better."
As the city's expanding population becomes increasingly seduced by Downtown Miami's burgeoning new urban environment, Geitner anticipates that the positive trend in the condo market will grow stronger with the recovery of the economy. "Miami is going to come out roaring. When the economy stabilizes, it's just going to bust out. Right now, we want people to know that what they think is going on in downtown Miami's condo market, isn't going on."
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