It's not exactly a secret that Miami's latest unhinged condo boom is being fueled by foreign money, but the exact number of new residential units being bought in downtown by those from abroad is eye-popping.
According to a not-yet-released report from consulting firm Integra Realty Resources for the Miami Downtown Development Authority that was obtained early by the Wall Street Journal, "90 percent of the buyers of new residential units are from abroad."
That means just 10 percent of buyers are Americans, and there's no telling yet exactly how few of those shiny new condos are being bought by actual Miami residents.
It's not much of a surprise, though, considering prices on new units are steep.
Prices for condos built during the 2003-to-2008 boom have increased about 75% over the past two years, to $400 a square foot from $230, the study found. Units currently under construction typically cost $450 to $550 a square foot. And those in projects that haven't yet broken ground are averaging $550 to $675 a square foot.
And Integra sees no sign that demand from those mostly South American, European, and Canadian buyers is slowing down.
Yes, Miami is an international hub, and it's no surprise there would be a lot of international rich owners who have condos here.
Yet it only emphasizes how Miami's rank-and-file residents continue to get screwed by the condo boom. Rising condo prices push all rents up. Developers are moving into once-affordable neighborhoods like Edgewater. The current market has also made it almost economically impossible for developers to consider constructing rental buildings and affordable housing. They're shying away from producing new office space as well.
"If you didn't get land before, you're not doing rentals," Carlos Melo, principal at the Melo Group, told the paper. "The rental market suffers a lot when there's this distortion in prices."
So basically Miami's urban core is turning into a place for rich foreigners to keep a Miami pied-à-terre. If you're a local resident or a business looking for office space, sorry.