Developers in Miami have been pushing the high-end condo market in recent years, building towers the local population can't afford but that the global elite eat up. But new signs are showing the market may be slowing down once again.
In an article for MarketWatch, real estate broker Sep Niakin, analyzes five telltale signs the market is softening. First, Niakin points to the fact that lenders used to require a 20% down payment and now Fannie Mae has approved condos at only 5% down. Preconstruction deposit standards have also loosened, with a few new projects announcing they'll accept 30% down instead of the traditional 50% down.
Two other slightly unconventional signs Niakin points to are the spike in new real estate licenses and developers' quotes in otherwise positive articles. "To achieve their goals of selling their inventory, developers need to be overly positive to create sales momentum and a sense of urgency for their products," he writes. "When they start getting nuanced with their predictions and view of the current market, you know the market momentum is slowing."
The most telltale sign of all, though, is halted projects. Since last June a high number of new projects have bit the dust, suggesting developers know there isn't a market to sell to right now.