The last couple of years have been incredible as Miami’s real estate market has experienced quite the boom. Wealthy individuals from both the United States and around the globe have picked up properties in South Florida because of the culture, weather, scenery, and luxurious lifestyle. While overall, the market continues to grow, industry experts are beginning to predict a slowdown in 2015 after significant drops in November condo sales. But not everyone is buying it according to a recent article from The Real Deal, which asked the all important question, “Where is Miami in the current real estate cycle?”

Richard LeFrak, a local developer, recently stated that he’s not concerned about a slowing market. “I’d be worried if interest rates go up and consumer confidence drops,” he claimed, “but the U.S. economy is doing well and the stock market is high.” According to Reid Boren, co-developer of the Biscayne Beach tower in Edgewater, more than half of the buyers on his project are from New York City. He claims that “you can buy a unit for a third of the price and the cost of living is half of what it is in New York,” also citing the growing cultural aspects and infrastructure that are now present, but weren’t in the last cycle.  The Miami market is also benefiting from a diverse mix of investors from South America and Europe. Additionally, Gregg Covin, principal developer of One Thousand Museum, points out that the buyer deposit requirements of 50% or more is a stabilizing factor this time around.

But the sting of a crashing market, such as the one in 2008, is still on the minds of many involved in the industry, and signs that point to a slowing market are not being ignored. Sales of existing condos in Miami-Dade recently dropped 15.5%. But at the same time, the U.S. dollar has gained 30% against Argentina’s peso, 11% on Brazil’s real, and 8% against the Euro. And with dropping oil prices, Russia’s ruble and Venezuela’s bolivar have nearly collapsed, signalling hard recessions in both countries. Subsequently, luxury home sales of $1 million or more in seven U.S. markets with active international investing (including South Florida) only rose 5% in the third quarter, compared to last year’s 46%. John S. Hekman, an economist with the Berkeley Research Group, stated that this is evidence of an impending bubble. “This happens a lot in real estate. The economics look very good when you are about to begin construction, but how many people down the road are going to close or hold on to those units?” He further states that it is tough to determine whether foreign buyers are purchasing condos in order to use them, or so that they can own hard assets in a stable economy. If it’s the latter, as soon as prices stop going up, we may see a lot of these units back on the market.

Even with some alarming “warning signs” the general consensus is that the industry does not need to be concerned about a collapse on the scale of what was previously experienced. Jake Roffman, principal of 13th Floor Investments, claims that no one is taking the serious risks that were seen between 2005 and 2007. It’s inevitable that a wind down will occur at some point. But according to industry experts, because the fundamentals that are supporting this boom are much stronger than before, the “come down” will be much gentler.