The State of Downtown Real Estate
Reflections on one of Miami’s preeminent industries during COVID 19 and beyond.
Cristina Palomo is a Realtor Associate with Riteway Properties, a boutique family-owned firm since 1971. Ms. Palomo and her family, including a school-age son, are downtown residents.
We cut to the chase.
Downtown News: What is the state of Downtown Miami real estate?
Cristina Palomo: I see traffic in listings for lower-price ranges, like under $400 thousand. I see many investors from New York, California. There is a lot of interest in those low-price units from an investment standpoint — buildings that have reasonable maintenance fees and rentals make sense. The higher-end units are still a bit slow but are beginning to pick up in comparison to March when the lockdown was in place.
DN: Even with the resurgence of COVID?
CP: Yes. People want virtual tours and are asking for videos to be sent. Many are making decisions based just on that, without actually entering a property or traveling to Miami. That is an adjustment we all had to make as brokers, figuring out ways to deliver virtual content.
DN: Some reports point out that sales are down 40%.
CP: Sales are down especially in the higher price points. We have been challenged with that issue even before COVID. And the pandemic has not helped, but it’s starting to improve.
DN: Speaking of COVID, news reports also point out that urban-core residents are opting for single houses in neighborhoods like Shenandoah?
CP: I don’t think there is going to be a mass exodus of us condo dwellers who are already here and accustomed to the lifestyle. You might have some that for health reasons, those who have pre-existing conditions, want to have their own space. That’s a limited trend.
Interest rates. Money. Taxes.
Difficult situations can present opportunities.
DN: Is this a good time to buy?
CP: I see great opportunities out there for buyers. Money is really cheap and interest rates are historically low, and I am hearing those rates will remain for the next 18 months. It’s a buyer’s market, whether you are buying for the first time or need an upgrade. The lockdown has been a time to reflect on what we really need from our home. Working from home is a trend that is going to stick, and an apartment with a home office now makes sense. Maybe this is the time to go for it. If you factor-in mortgage, maintenance and taxes, you might end up paying $100 more than for rent. Some renters are put off by the extra one or two hundred, but they are not taking into account amortization. That is how you build wealth for the future.
DN: The state has taken a serious financial hit during the COVID Pandemic. Can we expect to see a hike in real estate taxes?
CP: I don’t expect that to happen. Taxes will stay consistent at the two percent level mark.
A Young Demographic.
Statistics show that Downtown residents are predominantly young and single, or married couples without children. Such statistics are changing. More school-age children are seen around the parks and sidewalks.
DN: How important are schools for real estate appreciation?
CP: Extremely important. It is a tried and true concept that “A” school districts elevate property values significantly. Especially when you have young children at the elementary school age, when you are starting a family, there is much competition for well-priced homes in solid school districts. A good public school means not having to pay for private schools, and families can spend that tuition money in their homes.
DN: What is the school scenario for downtown?
CP: The Brickell Southside Elementary School expansion is going to help, and iPrep, but until designated seats for downtown kids are guaranteed, or a school is built here, we will have a challenge. Let me note that even if admission is not guaranteed for Downtowners, the Miami Children’s Museum Charter school is a wonderful option for K-5 right in our footprint. In addition, they have the ECI (Early Childhood Institute) — 18 months to pre-K, which my son attended for 4 years. I cannot think of a better environment for learning.
Downtown vs. Brickell.
Oscar Wilde said that beauty is a science that needs no explanation. It doesn’t take a rocket scientist to know that Brickell is cleaner, has schools, and fewer issues with homelessness.
DN: Why would anyone choose downtown over Brickell?
CP: The Brickell Bridge… (laughs.) I am being facetious. But seriously, for me, access is very important because I move around a lot. Even though we have our challenges here in downtown, the traffic in Brickell can be paralyzing. Sometimes you are stuck there for an hour. Here we have a lot of ingress and egress options. Traffic is a serious consideration for people when they are planning to move.
And lifestyle, if you want to walk to a Heats game or walk to the Adrienne Arsht Center for the Arts or the Frost Science Museum… Only in downtown. We have cultural amenities that Brickell doesn’t have. Furthermore, we do have some green space, two great parks. For me, those are the reasons we chose downtown.
CP: Take a chance on downtown. For a five-ten year panorama, it’s going to be hard to go wrong with an investment if you are willing to hold on long enough. There are many great opportunities.
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