Miami hosted the BisNow South Florida Deal Flow and Investment Strategies Summit, gathering real estate and financial professionals together. Despite changes in real estate over the past year, the market remains resilient in many parts of the country. For the event, M Patrick Carroll was among the speakers to share their knowledge of the markets.
M Patrick Carroll brought his expertise surrounding the multifamily housing market. He is the founder of CARROLL, which is a real estate investment and management company in the multifamily housing market. His company currently manages over 30,000 multifamily units and operates in seven different states.
The South Florida real estate market was discussed, as the area has seen more and more investors jumping into the market. M Patrick Carroll discussed that the market is trending towards suburban areas, contrary to past years, where more people were moving to cities.
Even though the South Florida market has seen tremendous growth, M Patrick Carroll sees some potential issues affecting the current trend. There are three areas that he sees could be problematic to the current growth curve.
Shift in Market Dynamics
In essence, what goes up, must eventually come down. For South Florida that could mean a rise in interest rates or increased hurricane activity that could scare buyers off.
South Florida has very high home insurance rates. Because of the unpredictable and often damaging weather conditions, insurance rates are higher than normal, which might leave buyers wary.
The cost of land has steadily risen. Investors are paying more for the land, as less is available, meaning profit margins are decreasing. Their cap rate or overall profit is dwindling. Of course, there are other factors to consider, but this is a tool investors use to determine values.