2016 was a year that the South Florida real estate market saw slowing sales, especially in the luxury condominium market. Developers are now being more realistic with their pricing and putting new projects on hold. The impact of a strong U.S. dollar compared to foreign currencies reduced the buying power of some international buyers. The expected increase of potential UK buyers from the Brexit turmoil never significantly materialized. The U.S. Treasury department requirements that title companies report cash sales of over $1 million and disclose the actual name(s) of the buyer(s), not just the name of a corporate entity, has slowed some high-end sales. This requirement is meant to identify criminal activity and stop money laundering. The tumultuous presidential campaign with so many hot button issues and uncertainty also contributed to the slow down. Despite these challenges and with lessons learned from the past, the South Florida real estate market remained relatively stable.
Looking ahead to 2017, we can expect developers to hold off on new projects while purchasing and banking land for future development. Existing inventory in the luxury condominium sector will be more competitively priced. The middle and entry level single family market will continue to experience price growth due to a shortage of inventory. As demand from Canada, Europe and Latin America slows, the void will be filled by domestic buyers as well as buyers from China, Turkey, and the Middle East, who are looking for a safe investment haven. Foreigners are also taking advantage of the federal EB-5 Immigrant Investor Program. With a $500,000 investment and the creation of 10 jobs, foreigners can legally obtain green cards for themselves and family members.
With some adjustments, the fundamentals of the South Florida real estate market will continue to be on solid footing. Buyers, both domestic and foreign, will continue to be attracted to South Florida.