The Wall Street Journal reports that the market for condos in Miami is slowing markedly as foreign buyers lose purchasing power and supply continues to soar. For the art market, this is an interesting tell as art and real estate—especially in cities like New York and Miami—are driven by many of the same economic and social forces. The buyers are often the same persons too.
In the fourth quarter of 2015, the number of Miami Beach condo transactions declined nearly 20% from a year earlier, while inventory jumped by nearly a third, according to a report from appraisal firm Miller Samuel Inc.
The median sales price slipped 6.6%, according to the report. “The condo market has peaked,” said Neisen Kasdin, a real-estate development lawyer at Akerman LLP in Miami. “Sales velocity has slowed down considerably.” Many of the forces buffeting the Miami market are also hitting luxury markets in New York, Southern California, Australia and London. A strong U.S. dollar and weakening local currencies, dropping oil prices and global economic turbulence have crimped the buying power of foreign investors. […]
Miami developers said they are seeing increased demand from New Yorkers and Chinese buyers looking to buy second homes, but that is unlikely to replace the sharp drop in demand from South Americans.
“The depth of the Chinese market, or the European or Canadian market, is not enough to make up for the South American buyer,” said Anthony Graziano, senior managing director at Integra.