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A headline this week confirmed that Miami is now the “least affordable housing market in the U.S,” as South Florida prices continue to skyrocket.  As a result, in recent months we’ve seen a surge in savvy international property investors moving away from the overheated South Florida market and targeting Panama.

We’ve seen this phenomenon before. It’s the Miami Effect. We see it all the time. When Miami prices get out of control, Panama real estate is the logical alternative. The two coastal cities, best known for their iconic residential towers and sunny climates, share similar clientele. (And now Panama City has its own man-made islands, Ocean Reef, Latin America’s version of Fisher Island.)

The real estate markets often work in sync. When Miami is too hot, Panama grows more attractive. As an investor, you can find similar quality apartments, with steady demand, at far more reasonable prices.

Right now, there is nothing reasonable about Miami prices. In Miami-Dade, the median sales price hit $525,000 in December, a 15% increase from the year before, according to the Miami Association of Realtors. “The median sales price last month is the highest ever recorded in Miami-Dade since the association started tracking the housing market in 1993,” the Miami Herald reported. It exceeded the previous high marks in April and July when median prices reached $515,000.

Miami is a city of cycles. I worked in Miami early in my career and it’s always been a roller coaster. Now we’re clearly hitting that peak right before the drop. Anybody familiar with Miami knows it’s coming. All the factors are in place: easy money, irrational exuberance, and diminishing supply. At the moment, Miami-Dade has two months of houses on the market for sale and just over three months of condos, making it an “extremely tight inventory,” the Miami Herald reports

In Miami, these conditions lead to bidding wars, crazy prices, and an unsustainable market that will ultimately crash. If there is a lesson you learn in Miami real estate it’s this: buy after the crash, not before the crash.

In Panama, we can always tell when this is happening. Investor clients start to shift away from Miami, recognizing that Panama is simply a better value. It also offers similar convenience, security, and international business climate. There is also steady rental demand, making it possible to achieve better yields on a property than Miami can produce these days.

Panama City is the “Miami of Latin America” in many ways. And now more than ever, it is the perfect way for property investors to skip the craziness in Miami.

Jeff Barton is Managing Director of Punta Pacifica Realty, the largest sales, rental, and property management company in Panama City.