Real estate experts at The Real Deal’s Miami Real Estate Forum addressed concerns about a potential bubble in the Miami market, arguing that the city’s reliance on cash transactions distinguishes it from previous real estate downturns.
Ana Bozovic, founder of Analytics Miami, described a recent UBS report labeling Miami as highly vulnerable to a bubble as inaccurate. “This market is built on cash,” Bozovic said during a panel discussion moderated by Stuart Elliott, Editor-in-Chief of The Real Deal. She added: “Usually when assets collapse, it’s because there’s a collapse. The bubble pops when the underlying assets can no longer sustain the debt, and it all goes away, kind of like a flammable house of cards. We don’t have this setup.”
Dan Kodsi, CEO of Royal Palm Companies, stated that current development trends differ from those before the 2008 financial crisis. He explained that high construction costs are driving up prices for new high-rise units: “The issue is we’re building product that’s expensive, and because of construction costs, when you’re building high-rise especially, you have to sell it at a very high price per foot.” Kodsi also noted that rising housing costs are causing some local residents to move to other Florida cities such as Orlando. “Every part of Florida, you’re seeing grow,” he said.
Panelists discussed possible migration from New York to South Florida following Zohran Mamdani’s victory in New York’s mayoral race. Brad Meltzer, president of Two Roads Development, cautioned against expecting an immediate influx: “I think the expectation that you’re going to see something immediately, like, the press keeps kind of glorifying like, ‘oh, tomorrow, there’s gonna be a million people moving here.’ That’s not going to happen, but it’s going to happen after a matter of time. Some people have families. They have kids. You don’t just pick up and move tomorrow, but the investigation process is going to start to happen.”
Both Kodsi and Meltzer commented on ongoing legal challenges related to their respective projects. For Two Roads Development’s Edition Residences project in Edgewater—a site involved in litigation over condo buyouts—Meltzer said: “It’ll take a little bit more time. There’s been discussions behind the scenes with that, but it’ll get resolved. It has to resolve itself. When something is valuable enough, parties have to compromise like anything else in life, and there’ll be a compromise that takes place, and everybody will feel that they can get a good deal, and we’ll move on.”
Kodsi is currently dealing with foreclosure proceedings for his Legacy Hotel & Residences project at Miami Worldcenter and told the court earlier this year he is seeking $390 million in refinancing for the development. Although barred by court order from discussing details about the lawsuit publicly, Kodsi said progress continues: “That ugly dumpling, let’s say, is going to be a beautiful swan when she’s built, a great project.”
