Sun shines on Miami real estate sector

Like the tide that laps Miami, Florida's famous coastline, the property cycle in America's "sunshine state" does tend to ebb and flow. The difference is that with real estate, you can never pick exactly when.

It appeared that Florida was one of the first to sink in the United States property tsunami but, as it turned out, the market was already on a collision course, weighed down by a top-heavy condo load.

Peter Zalewski, a principal with the Greater Downtown Miami-based real estate consultancy Condo Vultures LLC, says there were more than 60,000 South Florida condos on the market when Lehman Brothers failed in 2008, and with the US financial system on the brink of meltdown, whole towers remained vacant. A large number of foreclosures and distressed sales followed, and even though these still continue today, 49,000 of these units have at last been sold. Locals can feel a change in the wind: they take the rattle and hum of construction cranes now active once again as the sign of a city under development.

According to Zalewski, at least 21 new condo towers providing 7,300 units are proposed for Greater Downtown Miami, with more projects expected to be announced. Nearly 110 towers with more than 15,500 units are proposed for the tri-county South Florida coastal market of Miami-Dade, Broward, and Palm Beach. "Many of the proposed condo projects that never got built during the last boom-and-bust are being revived," he says.

Sales figures certainly indicate a revival. Natascha Tello, chairman of the board, Miami Association of Realtors, says: "The Miami real estate market came back in 2011 with record sales and continued growing in 2012, as prices posted double-digit appreciation and sales set a second consecutive record despite a housing inventory shortage. It exceeded even the boom in 2005."

The market "has surpassed even the most optimistic expectations", and recovered faster and stronger than any other market in the US.