Because Miami’s prior decade of excessive condo building was something akin to a multi-year sporting event watched and followed by millions around the world, today’s condo environment can now be summed up in three words: “Game On, Again!”
But the game is much different now. Unlike the prior condo boom, fueled by thousands of U.S. consumers and condo speculators using 90% to 100% leverage to finance their purchases, today’s buyers are mainly foreigners — and they buy in cash.
The National Association of Realtors (NAR) reports that the total residential international sales in the U.S. for the past year ending March 2011 equaled $82 billion, up from $66 billion in 2010. Total international sales were split evenly between non-resident foreigners and recent immigrants, while combined total domestic and international existing-home sales in the U.S. were $1.07 trillion.
Therefore, Miami has now become the main beneficiary of this growing global real estate investment trend.
Emerging economies in Latin America, mainly Brazil and Colombia, coupled with favorable exchange rates, are driving an historic multi-billion dollar per month inbound “flight of capital” from the South into Miami that most other U.S. markets don’t enjoy.
According to the Miami Association of Realtors, Miami experienced a 54% increase year-over-year in condo sales in the month of June 2011 alone. Most of those sales were to international buyers, who mostly purchased in cash.
Miami now is the leading international real estate market in the U.S. according to Jed Smith, Managing Director of Quantitative Research for the National Association of Realtors.