We at Fried On Business like to re-visit the South Florida multifamily housing market periodically, and this time it was a pleasure to have some help from two real experts in the field.
Anthony Burns and Brian Bandell joined me on the show to give their perspective on the market and share some thoughts about where things are going.
Bandell, the longest tenured writer at the South Florida Business Journal, said there’s still lots of construction out there. Sales of new units have slowed, but there’s a huge number of new development applications in the pipeline.
“For anyone who’s been downtown and looked at the cranes, believe me, there’s no shortage of construction going on,” he said.
Burns, co-founder of DevStar Group, said the major challenge for new construction now is the scarcity of labor.
The slowdown in buyers, he added, will naturally regulate the market and put a brake on the system. Those projects with approved applications won’t proceed if the pre-sales aren’t there. Financing won’t be available, so there won’t be an overbuilding issue.
DevStar Group and The Plaza Group are under way on Marina Palms, a 468-unit luxury condo development with a 112-slip marina on Biscayne Boulevard at 172nd Street.
From my perspective, I think it’s becoming evident that people who live here are having trouble buying condos. Price points have climbed significantly.
Bandell said rentals are filling the gap, along with single-family home purchases. Since Fannie Mae hasn’t approved many of the new condo projects for financing, he said, local buyers find it easier to purchase a house.
Burns said buyers from Brazil, Colombia and Venezuela feature prominently in new condo purchases, mostly because of capital flight. They include:
– Investors, who usually buy smaller units, mostly inland.
– Residents, who tend to buy larger units, usually on the beach.
And here’s another wrinkle: For the more expensive rental units, doubling-up seems to be the preferred solution. I see a lot of roommates coming and going from my own building.
While price is an issue in the more established markets, things are still affordable in North Miami Beach, which is undergoing a renaissance, my guests said.
Three years ago, prior to the election of new Mayor George Vallejo, North Miami Beach was stuck in the 1970s, Burns said.
“The believed if they don’t build it, they will not come. The problem was that Sunny Isles was exploding, Aventura was exploding, and North Miami Beach was caught in the middle and getting all of the downside of the traffic and congestion – and none of the tax revenue,” he said.
The city has been a great partner in the development of Marina Palms and now has a business-friendly administration, he added.
“Five years from now, the Biscayne corridor where North Miami Beach is will be a completely different animal that it is today – and that will be to the benefit of the entire city,” Burns said.
Recent zoning changes in North Miami Beach have allowed taller construction and a mix of uses, Bandell said. Developers are pursuing that with zeal, and several new projects are under way.
We covered a lot more territory in this interview, including:
– How the addition of jobs is transforming North Miami Beach.
– Apartment and condo activity in Downtown Fort Lauderdale.
– How the residential development business is likely to play out over the completion of this business cycle.
Click here to listen to the full interview with Anthony Burns of DevStar Group and Brian Bandell of the South Florida Business Journal.
