The day Miamians become the area’s top-tier homebuyers
Written by Michael Lewis on November 13, 2013
Not many years ago a Miami-Dade creator of a vast high-end condo project decided to target the North. He hired a marketing team oriented to New York and bombed – then shifted to a team targeting South America and struck gold.
Today he’d be better off sticking with his New York target, according to top-tier realty experts who say New Yorkers in general now pay more than South Americans for the same quality purchases here and that New York has taken a 15% share of Miami-Dade County’s luxury market.
New Yorkers, the experts say, find $3,000-a-foot residences inexpensive.
We’ve always had a huge New York market, of course. Retirees used to flock here for low-cost housing and living, plus weather and recreation. There were so many that – like South Americans today – they felt immediately at home in Miami.
But now, says one prominent broker, instead of coming to retire, the New York buyers are younger and coming here to play.
All of that is good news for the realty market, which has managed to soak up tens of thousands of unsold properties in the past five years and as a consequence is again in the euphoric process of building more and more and more high-end condos. Someone has to be around to buy them all.
In recent years the focus has been on individual investors from South America and Europe who have seen value in buying and renting out those thousands of available condos. And today, as we report this week, China is becoming a significant player in the market too.
While the changing nature of investors is of keen interest, the longevity of that interest remains in question as long as the reasons for purchase are retirement, investment or playtime second or third homes.
Brokers say, for example, that we’re becoming the new Hamptons. If we’re the new one, what happens to the old one? And what happens to us when somewhere else becomes the new Miami?
Truth to tell, all those residential uses – for retirement, investment or second-home play days – depend on factors that shift with economics and national and global conditions in a way that undermines Miami’s long-term stability.
For that reason, while we welcome all homebuyers we absolutely treasure the breed that is too scarce at the upper end: active, working top-level professionals who come to Miami long term for careers.
It’s wonderful that what seem to us exorbitant prices on residences look positively cheap to well-heeled New Yorkers. But in the long run, being cheaper is not the marketing position we should be in for Miami’s wellbeing.
We need to become the magnet for active, working executives who see both employment and entrepreneurial opportunities in a Miami with an expanding economy that is also producing high-paying jobs for its own residents.
That requires our community to provide all the necessary infrastructure, starting with education that produces the human capital that future waves of business opportunities will require, be they in aviation or high-tech, biomedical or creative fields.
Frankly, try as we might we cannot control which of these areas will grow here, but to have strong growth in any of them we need to have both the right people and the right community amenities – from culture to recreation to transportation that actually gets people from here to there conveniently.
We must become more of a place to live, work and prosper aside from serving the visitors and second-home residents. We need to create those job opportunities.
While it’s a goldmine for the real estate world that New Yorkers, South Americans, Europeans and Chinese buyers want to invest or play or retire here, think how much greater the goldmine if local workers were rising up the ladder and able to buy or rent more and more attractive residences at higher and higher prices.
After all, we will only have a critical mass of high-end employment and business ownership opportunities for upper-end outsiders from anywhere on the globe if we also have a large pool of such opportunities available to – and being accessed by – those already here.
The long-term change of Miami to focus on future business opportunities internally as well as externally will provide the vital third leg of the economic stool that so far has stood primarily on real estate and tourism. A two-legged stool is inherently unstable. Three legs – or more – will provide long-term stability.
Meanwhile, of course, those New York sales at 3,000 a foot look just great.