Miami Design District and Surrounding Real Estate

Most major metro areas in the country have a part of town that is considered an up and coming area on the verge of a real estate boom.  In Miami, that area is called the Design District.  Bordered by 36^th and 42^nd Streets on the south and north, and Federal Highway and Miami Avenue on the east and west, this trendy part of Miami is about to experience a large upswing in the real estate market. 

Over the past few years, warehouse space has been converted from low-rise warehouse and gallery space into high end retail space, restaurants, cafes, and art galleries.  In fact, many high end retailers like Louis Vuitton, Hermes, Dior and Cartier are moving their Bal Harbour shops to the Design District.  Surrounded by prominent Miami neighborhoods, the Design District is poised for huge growth and major increases in real estate value.

Design District Real Estate

To the south of the Design District is Midtown Miami with its high-rise condominiums, office space and retail space.  Just north of the Design District (and just south of Little Haiti) is an area of single family homes that offer tons of opportunity for an investment in a position to provide immediate equity.  These homes are situated in neighborhoods like Buena Vista, Old Spanish Buena Vista, Lemontree, and Brentwood and built mostly between 1920 and 1960.  While some homes have tons of character with their Mediterranean and Spanish architectural styles and others are in need of lots of work, the common denominator with all the homes is that they are affordable and are in a location that is hip and close to everything.

Currently, there are about 15 single family homes in the Design District area that are priced up to about $500K.  These homes are mid-sized homes ranging between 1,000 and 2,500 square feet.  List prices increase as the address gets closer to the Design District.  With list prices at this level, not only are they affordable but they easily accommodate renovations to bring them up to a level that is aesthetically and financially comparable to the beautiful homes in the outlying neighborhoods to the east like Morningside and Bay Point. 

According to Trulia, over the past six months, similar homes sold for significantly less than their estimated value which is based partly on location.   Remodeled homes within one to two blocks of the Design Districts have listed and sold for well over $500K.

Huge Opportunity

There is a huge opportunity in the Design District to buy a Miami single family home at a very low price and walk into the home with equity.  Not since 2006 has this been an option for home owners especially in Florida.  For real estate investors and those who have the desire to recreate a masterpiece, this is the place to be.  Be part of the transformation of this up and coming neighborhood. 

Impact of Venezuelan politics in Miami Real Estate

Venezuela was once one of the main recipients of immigrants from Europe after the second world war. A lot of companies in Venezuela were started by European entrepreneurs who got there with nothing but the willingness to live in a country in peace. 

That trend is now on reverse. Middle and upper class citizens are leaving the country as a result of lack of opportunities and more importantly safety concerns. Earlier this year, a group of students produced a video called “Caracas, ciudad de despedidas” which means Caracas, the city of departures. The main reason why many people are leaving Venezuela is because it is not safe anymore to live there. Caracas was never a safe city but the murder rate now is higher than cities in war and the kidnapping business is flourishing. It is very common to hear stories about people leaving the country after they were kidnapped. This business was showcased in a video called “Extreme World – Venezuela”, which was produced by Ross Kemp, a British journalist who actually had the opportunity to interview a group of kidnappers in Caracas who admit that this has become a very profitable business. According to the video, the average kidnapping lasts a couple of days and the ransom averages five thousand US dollars.

Hugo Chavez was reelected on October 7th as president of Venezuela. He is still very popular after 14 years in charge of the country with the biggest oil reserves in the world. He has used this oil bonanza to finance his “21st century socialism”.  He has taken advantage of the fact that no other president previously had paid much attention to the poor who were always left out.

When Chavez was first elected, a lot of people got scared thinking that he was going to follow the Cuban model, with a socialist state where there is no private property. During that time, property values went down significantly and then they recovered after people started to realize that he was going after big multinationals companies. After being nationalized or left without the capability to obtain foreign currency, many companies have decided to leave the country. Procter and Gamble is one of them. They moved their Latin American headquarters to Panana in 2008 after being unable to obtain foreign currency for years.

Miami has always been one of the main targets of Venezuelans who move abroad. According to the Miami Association of Realtors, Venezuelans are in first place of foreign groups buying real estate in Miami with 16% of the purchases. Doral, a city located in west Miami is the US city with the highest percentage of Venezuelans with over 20%. Real estate agents in Doral who deal with Venezuelan clients are used to hearing the phrase “Plan B”. In fact, a fellow real estate broker started a real estate company called Plan B International Realty. 

Elections are usually milestones and people wait to see election results eagerly to make important decisions. One of my cousins who currently lives in Caracas decided to request asylum in the US after Chavez was reelected last month. He and his wife have stable jobs in Caracas, but the fact that it is not a safe place to live and the lack of career growth opportunities prompted them to make the decision to leave the country. According to the US Department of Homeland Security, at least 4,500 Venezuelan families have been granted political asylum in the US after Chavez came to power.

Miami has always been the thermometer of Latin America. When the political and economic situation gets worse in Latin America more people come to Miami. As local residents say, Miami is the capital of Latin America.

After the real estate bubble burst, Venezuelans have been an important factor of the real estate recovery in Miami in addition to Brazilians and Argentineans. Some of them will continue to buy real estate in Miami as an investment and some other ones will buy after leaving a country where the middle and upper class find themselves in a place where they feel they don’t belong.

Venezuelans buy real estate in South Florida for a variety of reasons. Some buy after they decide to move to a place where they can find a large community of Venezuelans living abroad. Others buy to rent out, looking for a better return on investment than the one provided by banks. And others buy to have a “Plan B” so they can have a place to live in case something extreme happens in Venezuela. The definition of extreme varies, but the milestones most commonly heard are elimination of private property by the government, kidnapping, nationalization of industries by the government and election results. People see election results as a milestone because the presidential term in Venezuela has 6 years and every time Chavez wins, he gets a new opportunity to institute even further his 21st century socialism.

Therefore after last month’s elections, where Chavez won with over 55% of the popular vote, we will definitely see more Venezuelans leaving the country. South Florida real estate agents are eagerly waiting.