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The South Florida Pre-Construction Craze

Recent years have brought significant changes to the way developers finance property construction. In the past, real estate developers utilized pre-construction, also referred to as off plan property, to raise money from early investors before building. The use of this tactic resulted in more up-front funding for projects, and consequently, better financial terms from lenders. While fears of catastrophic booms and busts have spurred a trend away from pre-construction nationally, South Florida is moving in the opposite direction, embracing a true pre-construction craze.


There are currently more than 30 developments in South Florida funded through pre-construction sales, with plenty more projects in the planning stages. Many times, buyers are from faraway places, sometimes having never even set foot on the property.  This shows a very high level of confidence in the South Florida market, which has earned an explosive reputation for growth and opportunity for investment.


While pre-construction sales may be mistaken as an unstable method of investment, trends in South Florida show that the opposite case is true. Buyers are supplying more up-front money, often from foreign sources, further insuring that the property they are purchasing will be well utilized when complete. Developers are able to rely less on outside lenders and more on actual owners with a higher stake in the success of the project.


The result is an enormous shift in the South Florida real-estate industry, and a win-win for those involved in the deals Even while developers are empowered more than ever before, pre-construction buyers have a greater chance of a high return on their initial investment. The increased stability in such a rapidly expanding market should encourage those interested in property in the area that now is the time to buy.