The South Florida housing market is still strong; however, prices and the number of units closed is rising at a slower pace than in prior years. According to HouseCanary, a real estate data gathering and analytics firm, previously active markets are stabilizing and appreciation is projected to slow in 41 of the top 100 metropolitan areas, which include Miami, Fort Lauderdale, and West Palm Beach. Does this mean the area is returning to the last boom and bust period when prices plummeted? The answer, according to the experts, is no.
At a Bisnow South Florida Real Estate Forecast event held in Fort Lauderdale in late February, several major real estate executives and developers addressed this issue and indicated that those who are waiting for this to happen will be out of luck since “current market forces along with a lot of cash” will insulate the region from the type of downturn the market experienced with the last cycle. Nitin Motwani, who is developing projects in Fort Lauderdale and Miami, said, “The thing to understand this time versus last is that there’s so much equity already in the deals.” Michael Tillman, LeFrak Director of Florida Development, states “There’s a lot more intelligent financing coming to the market that is not blind lending.” Another conference attendee, Faisal Ashraf, of Lotus Capital Partners, had this to say “Some sub markets might have some over supply, but secular trends like migration and purchasing power keep South Florida, in the long run, a phenomenal market.”
In the past housing crisis, developers scrambled to unload units, or in some cases entire projects, but now thanks to more stringent lending standards they are better capitalized and are in a position to hold out for their prices. The attendees also felt that “healthy corrections” should be embraced in order to avoid a crisis.