Miami’s rapid growth at one time earned it the nickname the “magic city.” Now, after a tough few years due to the financial crisis, that magic is hitting the housing market. The Miami Association of Realtors says the city’s home sales are up 50 percent so far this year, while overall U.S. sales remain stagnant.
Oliver Ruiz, managing broker at Fortune International Realty and former residential president of the Miami realtors’ association, said the market is improving faster than anyone expected.
“People were saying, ‘Oh look at all those empty buildings in Miami,’ Ruiz said. "Well, all those empty buildings are now full."
Ruiz said foreign buyers have played a major role in the turnaround.
“Which country would you like to talk about? They’re all here,” he said. “Miami is the place to be. They all want a piece of the pie in Miami.”
Many buyers come from South America and Europe, but Ruiz called Canadians number one. He said Brazilians are especially active right now, and also cited recent sales to Chinese buyers.
At the Icon Brickell, a three-tower condominium complex downtown offering waterfront views and one of the nation’s longest residential pools, sales associate Rafael Gonzalez said sales surged when Fortune took over after lenders seized the complex and cut prices. Gonzalez said the building has just 5 percent of its inventory left. Most of the units have gone to foreign buyers.
“This is probably one of the most international buildings I have seen,” Gonzalez said. “We have buyers from all over the world. We have from Brazil, Argentina, Venezuela, Italia, from all over.”
One draw for foreign investors is low prices. Ruiz said Miami has never been so cheap. Another draw is the weak dollar.
“We have seen many, many investors from the Latin American currencies that are strengthening against the dollar,” said University of Miami finance professor Andrea Heuson. “To them, the purchase of a condominium unit, or four or five in a given building, seems like a bargain compared to what it was a year ago, simply because their currencies are stronger.”
Location, exchange rate
The Miami Association of Realtors estimates that about 90 percent of sales downtown are to international buyers, and many pay all cash.
Colombian investor Jaime Mejia paid more than $1 million cash for two units at the Icon Brickell. In addition to the currency benefit, he said Miami has its own special appeal. “Miami is the gateway to South America. It has an attractiveness that the rest of the country does not have for us Latin Americans,” he said.
But South Florida real estate is not just high-end properties downtown. And in many neighborhoods away from the urban centers, the effects of the housing crisis are still visible.
"Some areas are really on fire,” said Professor Heuson. “But then there are other areas, again, far outside with lots of oversupply that will take years to recover, if they ever do.”