Quote:
Originally Posted by Libertarian
The big difference between Atlanta and Miami: Miami is building condos, Atlanta is building apartments. The Miami condos will never be sold and existing owners as well as developers and banks are starting to sweat. The Atlanta apartments will be leased though perhaps for a bit less than projected. Here's why building apartments in Midtown or anywhere in Atlanta is a good deal:
1) Construction loan interest rates are low until at least after the election.
2) People can live in Midtown and elsewhere close-in and easily commute outward.
3) Rents are still cheaper than in practically any other major city.
4) The cost to buy is beyond the reach of younger people.
5) The synergies of living intown have greatly improved.
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Comparing the real estate markets between Atlanta & Miami is like comparing apples to oranges.
To say that Miami condos will never be sold is quite a statement since the city/metro is still building which is proof of demand.
The financing is also different between apartments & condos where pre- sales leads to financing for condos and developers need to reach a certain percentage of sales before lenders will finance projects.
The difference between the 2005 bubble & 2016 is that most buyers in Miami now have to put 50% down required by developers and increase their deposits as construction progresses which is unheard of mostly in the US since most younger domestic buyers don't have those type of funds available for a down payment.
This is a very common financing technique in South America and foreign buyers are used to it.
Foreign investors keeps fueling the condo market.
Another factor is that Miami also has a low inventory of apartments and that has been a issue for a while now. This has led to many condo owners renting out their units instead to cover their costs.
Of course when foreign buyer's nations have political or economic upheaval Miami's real estate market suffers as well.
It's just two different markets that aren't really that comparable.
Anyways, nice to see more infill in Midtown !