A new study confirms the latest chatter from real estate watchers: Miami’s sizzling downtown condo market is cooling down. Skyrocketing construction costs, overheated land prices and falling foreign currencies have finally caught up with a housing market that boomed after the lean years of the recession.
But unlike the last go-around, when highly leveraged projects brought the house of cards tumbling down, few observers expect a crash.
One sign of the current cool-down: the growth in resale prices for downtown condos is slowing.
The average resale price went up to $431 per square foot in 2014, a 16 percent increase from the year before, but still down from jumps of 22 percent in 2013 and 27 percent in 2012. Those numbers come from a report by the semi-autonomous, tax-funded Downtown Development Authority.
Downtown-area developers currently have more than 22,000 condos units in development, with the majority slated for Brickell and the downtown urban core. Some projects are nearing completion, while others are still in the planning stages.
The average price per square foot, excluding ultra-luxury projects such as 1000 Museum and Echo Brickell, is $563, according to the report. Prices are higher on the water in Brickell and Edgewater and lower further inland.
A shortage of skilled workers isn’t helping either. The number of construction workers in South Florida has fallen from about 168,000 in 2006, at the peak of the boom, to 106,000 last year.