Monday, July 2, 2012

South Florida Real Estate Cycle - Commercial follows Residential

The commercial real estate market in Miami-Dade County has gone through many ups and downs over the past several years.  During the real estate boom years (5 to 10 years ago), not only was the cost of buying commercial real estate rapidly increasing, but the rental rates spiked as well.  All that changed when the real estate market bubble collapsed.

Housing Market Collapse
Housing Market Collapse
Market Collapse
The residential market was the first to feel the effects of the real estate market's spiral downwards.

While the entire country feeling the effects throughout the real estate markets, the State of Florida was one of the most effected.

Within the State of Florida, the South Florida market, which includes Miami-Dade and Broward County, suffered greatly.  Home prices deteriorated fast, and it became very difficult for homeowners to sell their homes...let alone make a profit in doing so.

History Predicted the Commercial Real Estate Market Collapse
History shows that within the real estate cycle, the market conditions for commercial real estate follows those of the residential real estate market. While everyone knew the collapse in the commercial real estate market would come, Experts had varied opinions as to when it would occur, how severe it would be, and how long it would last.

Signs of Recovery in South Florida Commercial Real Estate
The residential real estate market in the South Florida area is recovering.  In fact, reports from Miami-Dade County confirmed that home property values have increased for the first time in many years.  Likewise, history shows that the South Florida commercial real estate market, consisting of retail, office, and industrial warehouse property, will also start to show signs of recovery.

Along with commercial property values strengthening, one would also expect that retail and industrial vacancy rates would decline, and rental rates would slowly rebound upwards.  However, only time will tell

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