The Miami housing market, after 5 years of being the national poster-child of distressed real estate (following at least five years as the poster child of real estate excess, a veritable American Dubai) has had a remarkable rebound according to Douglas Elliman's second quarter report. Its due to enough factors to fill the Everglades. Jonathan Miller, Curbed's very own analyst-on-call, and the author of the Elliman report, has helped us fill in the big picture.
Distressed sales - a significant segment for boom-and-bust Florida - have been held back from the market due to the large foreclosure-backlog in the courts and the fallout of the "robo-signing" scandal of late 2010 that exposed the improper handling of foreclosures by mortgage companies. The market share of lower priced distressed sales fell sharply to 40.6% from 53.9% in the year ago quarter, skewing overall price indicators upward although housing prices for non-distressed proper is generally stable or seeing modest appreciation. Listing inventory continues to fall sharply, partially from property owners with limited equity or who are infact under water on their mortgages to trade up to the next home. As a result they aren't listing their properties which helps keep price levels more stable.
With the "robo-signing" scandal wrapped up, JMillz expects distressed real estate activity to rise as a percentage of the market. However the court backlog is not expected to ease soon (red tape!) so this will be a gradual increase.
Miami is now seen as a global safe haven of capital, especially in the form of real estate (Manhattan is another). Initially the weak US dollar incentivised investors from Europe and South America to take advantage of of the discount. However, Europeans are faced with weakening economic situations as the debt crises expands across the region, and emerging economies, such as Brazil and the other BRICs, are facing bubble-like conditions, encouraging those economies to look elsewhere to invest. The strong participation by foreign buyers in Miami has accelerated the absorption of a large portion of the new development shadow that came on line during the housing bubble of last decade, and has thereby populated a forest of new residential towers that many had predicted to remain empty for decades.
· Miami Market Report [Elliman]