MIAMI – Miami real estate prices are soaring alongside new skyscrapers and high-rises, making downtown a pricey place to live.
"It is getting to the point where I think a lot of people are priced out," said Ryan Homan of Integra Realty Resources.
A recent study found that condominiums built during the 2003-2008 economic boom sold then for $230 per square foot. After a 75 percent increase, the same condos now sell for $400 per square foot.
Units currently under construction can be sold for anywhere between $450 and $550 per square foot, and proposed units to be built in the future are worth $550 to $675 per square foot in pre-sales. Super-luxury units can even fetch $1,000 to $1,200 per square foot.
The fact is that there is not much land left for sale in downtown Miami. An Argentine grocery magnate bought the last waterfront parcel last week for $125 million, five times the land's worth of $25 million in 2006.
"Ninety percent of the buyers are foreign (in Miami). That is not typical of any (other) market," said Homan.
As a result, the office-space market is getting tighter with a vacancy rate of only 15 percent. Because vacancy rates are so low, rental rates have steadily increased since 2009.
"Back then, in downtown Miami, if you were to lease a 1,000-square-foot apartment, you would pay about $1,500 a month. Today if you were to lease that same apartment, you are looking at $2,400 a month," said Peter Zalewski of Cranespotters.com.
Experts are hoping that thousands of newly planned rentals in the works will somehow stabilize these skyrocketing rates.