Commodity prices are stabilizing along with the lead times for equipment, he adds, and while not back to pre-pandemic levels, those prices have settled into a more predictable place than the spikes of 2020 and 2022 stemming from the COVID-19 pandemic and the conflict in Ukraine.

“This, along with the overall slowdown in the national market, has provided some relief to Miami, allowing subcontractors to catch up on backlogs, and it has helped with pricing,” Baro says. “The city is experiencing a ‘good busy,’ which is a departure from the overwhelming pace of the past few years.”

The focus in Miami is also moving away from rental market-rate apartments and offices and toward more diverse and complex projects that are growing in scale and intricacy, Baro says. That means more resources and management expertise from firms tackling those projects to harness the growing influx of resources from other parts of the country flowing into South Florida and to meet the demand for design and construction administration.

“High-end condominiums maintain a prominent presence, while planning of rental projects and commercial office spaces has seen a decline,” he says. “Market rate and rental project commencements are somewhat hindered due to escalating interest rates, which are putting pressure on already slim profit margins.”

Luxury condo projects in the right locations like in Edgewater and Coconut Grove are continuing to move forward, Baro says, suggesting to him a potential resurgence in that sector as developers move to proactively prepare parcels for the possibility of rapid development.

supertall structures are also being planned, Baro notes, including the 84-story Cipriani Residences, on which Mast Capital and Moss have already broken ground, set to be the tallest building on Miami’s Brickell Avenue.

He says developers are also analyzing the coming impact of Florida’s Live Local Act, a 2023 law boosting affordable housing by offering funding, tax credits and expedited approvals for multifamily developments if at least 40% of the units in a multifamily development are dedicated to rental housing at 120% or below of the area median income (AMI) set by the Dept. of Housing and Urban Development. In Miami-Dade County, 120% AMI for a single-person household is $95,400, increasing to $108,960 for a two-person household and $122,520 for a three-person household.

“Given the selective lending environment, this legislation can directly determine if a project moves forward or sits on the shelf,” Baro says.

Compared with last year, the market has stabilized and the uncertainty surrounding the cost and lead times for materials, commodities and equipment has steadied somewhat in the last few months, he says. Baro notes studies indicating potential oversupply issues in the Miami market over the past few years, but adds that those dynamics are constantly shifting.

But higher construction costs and stricter lending criteria have led to staggered project starts, serving to self-regulate the market and mitigate the risk of oversaturation.

“In today’s market, the multi-family sector is still relatively strong, albeit with a notable sensitivity to the lending landscape dictating the nature of initiated projects,” he says.

One challenge the local market faces is an influx of new residents driven by relocating businesses—including financial institutions like Blackstone and Citadel—that is driving demand for housing and supporting businesses.

Developers still encounter challenges, especially with lending requirements whose rigorous criteria remain a key factor that firms like Moss assess before committing to a new project.

Employment opportunities are more abundant than resources, he adds, and because of the persistent labor shortages, job satisfaction becomes a priority for workers.

“We’ve known this for a while at Moss,” Baro adds. “That’s why we look to provide the best opportunities on the best projects for our staff by making good deals and staffing them properly. Happy employees translate to client satisfaction.”