South Florida real estate is an ever changing market, especially considering the large Latin America impact. The pivotal economic movements in Latin America have impacted economies in more ways than one. Diego Arnaud, Aventura expert real estate broker, sat down with Haute Residence to discuss how the Latin American market is affecting South Florida and where he foresees the current market trends heading.
Explain the LATAM market impact in Miami?
Miami’s real estate market remains a top destination for foreign buyers despite economic slowdowns in Latin America. Diversified property portfolios and asset allocations are the leading factors for wealthy Latam investors.
What important economic movements are happening in Latin America currently?
New political forces are changing the political landscape in Brazil and Argentina, where a profound recession, inflationary pressures and currency devaluation are affecting the economies due to previous populist governments who were in power for almost a decade bringing: economic slowdowns, inefficiencies in capital markets and social crisis. Plus Venezuela’s legal government opposition is fighting Maduro’s corrupted scheme. These countries have enormous influence in Miami’s real estate market.
How does the Latin America market affect real estate in South Florida?
South’s Florida real estate market is extremely leveraged by Latin America buyers. Any economic slowdowns, government instability or currency devaluations affect the absorption rate in our market. But we also need to note that although the Latin American buyer is an important force in our real estate, so is becoming the North Eastern market which as I have mentioned before is gaining traction as investors capitalize on the recent tax cuts changes.
Describe the changes currently happening in the real estate market due to this connection with Latin America?
We have an all-time high inventory with prices plummeting due to a very slow absorption rate. Due to a strong dollar, sellers (from Latam) are playing the currency and willing to sale low in order to monetize opportunities in Latam; as is the case of Brazil. In the case of Mexico, due to change to a left populist government, many new investors are looking to Miami as a potential residence market, opening the space for permanent and new investment property absorption.
What current trends do you see that will affect the future of real estate in Miami?
Developers are eager to build more residential units and they are looking to build the low-income affordable residences in opportunity areas. Land prices are all time high, labor and the cost of materials are expensive and developer’s profit has shrunk. But the future is promising as Miami has incredible city assets, increasing diversity of entertainment options, a beautiful landscape and an exceptional year round weather. This is why it is a magnet for new, current, local and international investors.
What advice would you give buyers seeking to invest in property at this time?
The good news is that cycles are temporary corrections! Today is a buyer’s market and a unique opportunity to capitalize an investment in the high-end market. Steep discounts and incentive are in place. Real estate market will jump again and investors’ confidence will begin to absorb the inventory.