MIAMI—With the national stock market reaching all-time highs in the past year, many real estate experts have indicated that the US real estate market is bound for a bubble burst. That isn't the case in South Florida, however, according to a recent Berger Singerman survey. Results from the firm's fourth annual South Florida real estate survey reveal that, thanks to e-commerce advancements, continued foreign investment and the newly signed tax bill, professionals expect South Florida's real estate growth to continue in 2018.
The e-commerce boom is expected to make big waves in 2018 as 33% of survey respondents believe the warehouse and industrial sector will have the highest returns this year, and 48% believe that retail will have the lowest returns. GlobeSt.com caught up with partners at Berger Singerman to get more insights in this exclusive interview.
GlobeSt.com: Overall, what are the expectations of the South Florida real estate market in 2018?
Barry Lapides: The results of our South Florida Real Estate 2018 Outlook Survey indicate that South Florida real estate professionals are optimistic about 2018, although not as positive as last year. The optimism is likely due to e-commerce advancements, continued foreign investment, the booming economy.
Jeffrey Margolis: Although not passed at the time of the survey, the newly signed tax bill adds to the optimism and confidence in the real estate market. The results from the survey show that confidence in the real estate market for 2018 was sparked by improvements in the US economy with 42% of respondents citing it as the primary reason, along with high consumer confidence and low unemployment as the top reasons for the cited optimism.
Marc Shuster: While overall results reinforce confidence, the survey reveals there is still concern over the uncertainty of governmental policies and oversupply, as a noteworthy 62% reported those two matters as the most pressing issues facing the South Florida real estate market.
GlobeSt.com: How do the results compare to last year's survey?
Lapides: Results from the survey show that 31% of local real estate professionals expect 2018 will be even more successful than 2017. However, optimism was higher last year with more than half of respondents expecting 2017 to be more fruitful than 2016.
Margolis: In terms of foreign investment, 69% of respondents believe foreign investment in South Florida will remain at 2017 levels or increase, which is up from 63% last year despite the new administration's trade and immigration policies.
Shuster: Another difference is that in 2017, only 26% of survey respondents believed that oversupply was the most pressing issue facing the real estate industry, whereas in 2018 almost a third of respondents see this as the most pressing issue. This further justifies that the oversupply issue we are seeing in Miami is not slowing down in 2018.
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