Will There Be A Real Estate Bubble In South Florida?
With the national stock market reaching all-time highs in the past year, many real estate experts believe that the U.S. real estate market is headed for a bubble burst. That’s not the case in South Florida.
According to a new survey released by Berger Singerman, Florida’s business law firm, results reveal continued foreign investment and thanks to the newly signed tax bill, professionals expect South Florida’s real estate growth to continue in 2018.
The e-commerce boom is expected to increase in 2018 as 33 percent of survey participants believe the warehouse/industrial sector will have the highest returns this year, and 48 percent believe that retail will have the lowest returns.
“The expected industrial growth is consistent with the enormous activity we are currently seeing in the e-commerce marketplace,” said Jeffrey R. Margolis, partner at Berger Singerman and co-manager of Berger Singerman’s Business, Finance and Tax Team. “There is a greater need for warehouses to store products that people purchase online with expectations that they will be delivered in two days (or less).”
“In addition to companies needing warehouse space for storage, our real estate group has seen many businesses purchasing industrial space instead of leasing it, and converting the space into open offices,” said Marc Stephen Shuster, partner and co-manager of Berger Singerman’s Business, Finance and Tax Team. “We can expect to see areas that offer flex spaces like Weston, Aventura, Wynwood and Homestead prosper in 2018.”
Results from the survey show that 31 percent of local real estate professionals expect 2018 will be even more successful than 2017. Confidence in the market for 2018 is due to the improvements in the U.S. economy with 42 participants saying that is the main reason.
“The new tax law is expected to be positive for the real estate market,” said Barry D. Lapides, partner at Berger Singerman and member of the firm’s Business, Finance and Tax Team. “Local developers are upbeat about the new law and its benefits for real estate developers, as well as the anticipation that it will bring back more funds to the U.S. and potentially bring new residents to the sunshine state.”
The overall results reinforce confidence, but the survey reveals there is still concern over the uncertainty of governmental policies and oversupply. 62 percent of participants reported those two matters as the most pressing issues for the South Florida real estate market.
