The US real estate market typically follows a seven year cycle of growth and decline. When the market begins to recover, prices are at the lowest and expansion begins. This eventually causes a peak in supply, and the market begins to recede when demand lessens. The Miami market still experiences these steps, but there are more contributing factors compared to most other US markets.
In Miami, the timelines, peaks and valleys of the market cycles differ because of outside influences. “Miami is unique because the International markets have a great affect on real estate health in our area. We don’t just worry about the US economy” says Keith Darby, Rise Realty President. “Different international markets are always interested, or need to slow their activity for one reason or another. This makes the supply and demand cycle in Miami more revolving.”
The Miami market is truly international. Investors are coming from Latin America, China, Canada and Europe. Latin American countries are seeing economic uncertainty at home, so they see the Miami real estate market as a shelter for their capital. When Brazilian and Argentinian economies take a dip, real estate agents see an influx of people from these countries looking for a safer place to keep their investments. When authoritarian governments like China institute controls on assets, the wealthy look to move their investments to Miami in favor of the lax in comparison regulations. These actions from foreigners are keeping up the demand for Miami real estate.
Europeans and Canadians, however, are being more conservative with investments since their currencies have lost strength against the dollar. This balances the demand in the marketplace.
With demand sources offsetting each other, demand is kept steady and supply is also more stable. This prevents big swings in a real estate market cycle. Keith Darby explains, “Lately, one international region is strong, and another needs to pull back for one reason or another. It’s keeping the market even for longer, and Miami isn’t seeing the major swings it had in the last cycle.”