The average rent for a two-bedroom apartment increased 6 percent to $2,568 a month in the third quarter, compared with the year ago period, according toCondo Vultures LLC, a brokerage and consulting firm.
“There’s a boom in Miami that we’ve never seen before,” said Stephen Ross, chairman and founder of New York-based Related Cos.,said at the Bloomberg Commercial Real Estate Conference, reports Bloomberg. “Miami is probably the hottest real estate market in the U.S. from a residential perspective.”
Rental activity in greater downtown Miami, including for condos and apartments, jumped 12 percent in the third quarter to 1,650 from a year ago, Bal Harbour, Florida-based Condo Vultures estimates.
“Everybody thought Miami was finished, and now it has become again one of the top locations for developers for multi- family rentals,” said Robert Kaplan, principal at Ackman-Ziff Real Estate, a New York-based adviser that helps to arrange financing for clients such as pension funds and insurance companies. “Miami was counted as being out as recently as 2010 and in the course of a year or a year and a half the market has come roaring back. It’s simply amazing.”
In South Florida, New York-based Area is in a partnership with Coral Gables, Florida-based CC Residential on two projects, one of which is a 352-unit building in the Miami suburb of Doral. Area is also in discussions about a possible coastal project in the northern part of the city, said Richard Mack, chief executive officer of Area Property’s North America division.
In late 2010, Area bought Terrazas River Park Village Apartments, a failed condo project at the Miami River, for about $150,000 per unit. The rent at acquisition for a one-bedroom, one-bath apartment was $1,069 and has since risen 38 percent to $1,477, according to Mack.
“It was a great exercise as it showed us how much demand there was for this type of building,” Area’s Mack said, according to Bloomberg. “Everybody told us there was so much shadow inventory from condos and that it was not going to be absorbed. But we realized there wasn’t as much shadow inventory as everybody talked about and that a rental apartment building could very well compete in that market.”
When Bernanke prints money, things can turnaround fast. Miami is a leader, but most of the rest of the real estate markets in the U.S. are also improving. Be ready. Prices are going to soar, from single family homes to larger residential properties---and then the consumer price inflation will follow.