Big Unwind Begins in San Francisco, Miami, New York, Houston: Rents in “Primary Markets” Sunk by Apartment & Condo Glut
Soaring rents have hit the wall of reality.
This is how it is happening in Miami: A heroic building boom in Greater Downtown has created a phenomenal condo glut just when federal regulators decided earlier this year to track down money laundering in the real estate sector. It coincided with Brazil and Venezuela – Miami’s largest feeder markets – falling into political turmoil and economic chaos respectively. The “strong” dollar doesn’t help. And buyers from abroad have become scarce.
No one was prepared for this. The slowdown started a year ago when the resale inventory began to balloon. According to a new report by Integra Realty Resources for the Miami Downtown Development Authority, in May listings soared 58% from two years ago, to about 3,000 units, while monthly sales plunged 43%.
And new supply keeps on coming: In the second quarter, nearly 7,500 condos were under construction, with another 1,550 being marketed for sale.