If you build it, they will come. That’s what the past few years in Miami’s urban real estate market taught us, as thousands of young professionals, millennials and empty nesters flocked to the city center in search of a more accessible, convenient urban lifestyle. In fact, according to the Miami Downtown Development Authority, Downtown Miami’s population has more than doubled since 2000, with more than half of these new residents falling between the ages of 20 and 44.
But while these urban pioneers may have once been drawn by the affordability brought on by the crash, data confirms there is much more keeping them here – and encouraging others to follow suit.
The Miami DDA’s mid-market study, which was released earlier this quarter, confirms that as the condo pipeline stabilizes, developers are pivoting to rental projects, delivering record-numbers of units that cater specifically to this new year-round demographic that want to an urban lifestyle without the hefty price tag of a down payment. In fact, nearly 1,000 Class A apartment units have delivered since 2012, bringing the total number of multifamily units under construction to just below 3,600. These new rental units are in high demand, with new apartment units fetching rents at approximately 25-35% higher than that of older product.
This surge in rental activity comes on the heels of a more stabilized condominium market, as developers and lenders show restraint. The current condo cycle is past the half-way point for deliveries, with 5,180 new condos delivered since 2012 and 5,078 under construction. Seventy percent of the remaining condos under construction are already pre-sold.
The Miami Herald said it best, “rent prices are stable, development is being balanced with demand and financial institutions have raised their requirements for loans — all indicators that the city’s downtown area is on stable long-term footing.”
All in all, it seems like Downtown Miami is finally growing up, and shedding its boom-bust past in favor of a more mature and stable market. At the same time, the district is no longer just a place for wealthy buyers, but a 24-7 community accessible for young professionals seeking the conveniences and accessibility of an urban lifestyle.