Has Miami Beach lost its mojo?
That was the headline in a recent article in the Miami Herald.
Longtime observers of Florida real estate will recognize the familiar boom-and-bust pattern. Neighborhoods, cities and sometimes even the entire state become so hot that speculators, developers and financiers stampede in and snap up properties without regard for sound economics.
Then, when the economy cools and other areas compete for business with lower costs, cities such as Miami Beach suffer the inevitable consequences.
“At one point, I was purchasing property on South Collins for up to $1,800 a square foot for big-box clients. Now I get $700 because the retailers can’t bring in enough people to make those numbers work,” Drew Kristol, vice president at Marcus & Millichap tells the Herald.
In Florida, it’s all so predictable.
You could easily substitute formerly hot areas of Tampa or Orlando for Miami Beach. It’s a sure bet that today’s popular areas of Miami such as Brickell and Wynwood will one day lose their shine too when developers realize businesses refuse to pay exorbitant rents.
You can’t forecast real estate cycles with precision, but charging $1,800 a square foot is surely a sign that speculation is rampant. How is it that Lincoln Road is the fifth most-expensive shopping street in the U.S., according to Business Insider?
If you’re an investor, it pays to understand Florida’s boom-and-bust pattern. This is how you make money in Florida real estate.