Miami’s real estate market has been plagued for the past few years by exorbitantly high deposit prices. With a down payment on a pre-construction condo running upwards of 50 percent turning away potential buyers for so long, it’s no wonder the annual purchase rate of homes has been in steady decline. While larger firms don’t find this trend a serious barrier to entry, many of those looking for homes are deterred, and have turned their attention elsewhere. “This,” says Don Peebles, founder and CEO of Peebles Corp “is about to change.”
Mr. Peebles has been observing this troubling trend in the real estate market for some time, and offered several pearls of wisdom to The Real Deal. “It doesn’t make sense,” Don said in a recent interview with TRD. “Nowhere else in America can you do this.” With the common buyer turning their attention to cities with more affordable rates like New York, Washington, and Boston, Mr. Peebles knew that trouble was waiting over the horizon for Miami’s future. Highlighting the lack of job growth in Miami as another deterrent to those looking to build a future, he feels that both problems go hand in hand. Developers choosing to settle in areas with a more affordable deposit and taking potential jobs with them in the process, Miami is suffering on both fronts.
However, a light does glimmer at the end of this tunnel. Don says that changes are already starting in the Miami real estate business. Swire Properties announced that they have decreased their deposits to 35 percent rather than the astronomical 50, and Property Markets Group has begun allowing foreign buyers the ability to pay the large deposit in installments rather than upfront. With companies offering alternatives to property buyers, it won’t be long until change comes to Miami’s real estate woes.