For the first time since at least 2008, South Florida has more new condo units proposed than available for purchase on the resale market in the tricounty region of Miami-Dade, Broward, and Palm Beach, according to a new report from CondoVultures.com.
As of May 20, 2013, more than 18,500 new condos are proposed – not all projects have yet begun presales – for South Florida compared to 18,400 units listed on the MLXchange in Miami-Dade, Broward, and Palm Beach counties, according to research compiled by the licensed Florida real estate brokerage CVR Realty™.
“South Florida has been faced with a glut of condo resale inventory since the real estate crash of 2007,” said Peter Zalewski, a principal with the Greater Downtown Miami-based real estate consultancy Condo Vultures® LLC. “The recent surge in newly proposed condo towers combined with the shrinking inventory of resale units has flipped the direction of the South Florida condo market. Unless something changes, condo buyers could increasingly be faced with stiff competition for existing resale units and rising prices for condos in proposed towers.”
CondoVultures.com is scheduled to profile condo trends in the first quarter of 2013 in the 10 largest coastal markets in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties beginning the week of April 15, 2013.
The Condo Vultures® Market Intelligence Report™ plans to publish a 10-part weekly series that analyzes the markets of Greater Downtown Miami, South Beach, Bal Harbour / Surfside / Bay Harbor Islands, Sunny Isles Beach, Aventura, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Pompano Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island.
Of the more than 18,500 new condos proposed in South Florida, developers have announced nearly 14,350 new condos in Miami-Dade County, nearly 2,125 new units in Broward County, and nearly 2,100 new condos in Palm Beach County, according to Preconstruction Condo Projects Database™ from CraneSpotters.com.
Compare this with the condo resale market where the available inventory – including townhouses – breaks down with less than 7,500 units in Miami-Dade, more than 5,500 units in Broward, and about 5,400 units in Palm Beach, according to the data.
Prices for the new condo units in South Florida start at more than $400 per square compared to an average price of nearly $275 per square foot for units on the resale market in Miami-Dade, Broward, and Palm Beach, according to data from the Florida Realtors association.
Overall, South Florida’s condos and townhouse resale inventory has decreased in quantity by nearly 70% since the Thanksgiving holiday week – the symbolic start of the busy winter tourism season – of 2008, according to the data.
Nearly 61,000 condos and townhouses were on the resale market in the tricounty South Florida region on Nov. 24, 2008 as financial uncertainty reached an all-time high following the abrupt failure of the investment banking behemoth Lehman Brothers that subsequently triggered a near meltdown of the U.S. economy.
Nearly five years later, the number of condos and townhouses on the resale market in Miami-Dade, Broward, and Palm Beach counties has shrunk by more than 42,500 units as of May 20, 2013, according to the data.
Broward County has experienced the deepest drop in condo and townhouse resales available on the market.
As of May 20, 2013, less than 5,550 condos and townhouses are on the resale market in Broward County. Back in 2008, there were nearly 21,100 condos and townhouses for resale in Broward County.
In Miami-Dade County, there are less than 7,500 condos and townhouses on the market as of May 20, 2013 compared to nearly 24,450 resales available in 2008.
In Palm Beach County, about 5,400 condos and townhouses are on the market as of May 20, 2013 compared to nearly 15,400 resale units available in 2008.
Even though the U.S. economy continues to wobble along with modest GDP growth and a high unemployment rate by modern standards, the number of condos under contract in South Florida has spiked to nearly 13,000 – a large chunk of which are all-cash deals – as of May 20, 2013, according to the analysis based on Florida Realtors association data.
Back in 2008, the pending sales for condos and townhouses in Miami-Dade, Broward, and Palm Beach counties totaled slightly more than 4,400 units.
As of May 20, 2013, Miami-Dade County – where Aventura, Coral Gables, and South Beach are located – has nearly 6,500 pending contracts alone.
Broward County – where Fort Lauderdale, Hollywood Beach, and Pompano Beach are located – has nearly 4,600 pending sales.
Palm Beach County – where Boca Raton, Delray Beach, and West Palm Beach are located – has nearly 1,900 pending sales.
Several factors are impacting the changing South Florida residential real estate climate, ranging from the foreclosure freeze that has prompted some lenders to withdraw bank-owned properties from the resale market to a flurry of international buyers with strong foreign currencies who are attracted to the region’s discounted property prices.
The reduction of South Florida condo resale inventory combined with a steady absorption of new unit sales is increasingly showing signs of another construction boom.
Some six years after the South Florida real estate crash began in 2007, one new condo tower has already been completed in the tricounty region and 20 other highrises – Aventura’s Bellini At Williams Island; Greater Downtown Miami’s 1100 Millecento Residences, Brickell Citycentre (two towers), BrickellHouse, Habitat II, ICON Bay, and MyBrickell projects; Hallandale Beach’s Beachwalk; Hollywood’s Apogee Beach; Key Biscayne’s Oceana (two towers); Miami’s 4300 Biscayne Boulevard in the Morningside area; Miami Beach’s Faena House Saxony and Residences At Miami Beach Edition; Palm Beach County’s 4001 North Ocean project; and Sunny Isles Beach’s Chateau Beach, Mansions At Acqualina, Porsche Design Tower, and Regalia – are under construction as the post-crash development era gains momentum, according to a new CondoVultures.com report.
Fueled by investors primarily from overseas, about 2,450 new condo units remain unsold from a supply of nearly 49,000 units created since 2003 in South Florida’s seven largest coastal markets of Greater Downtown Miami, South Beach, Sunny Isles Beach, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island as of January 2013, according to a recent CondoVultures.com report.
The total number of unsold new condos does not include any of the more than 8,000 units that were purchased in bulk transactions by investment groups that plan to one day resell the units at a premium, according to the Condo Vultures® Bulk Deals Database™.
A number of the newly proposed condo units are not expected to be completed until 2014 when the unsold developer inventory from South Florida’s last real estate boom and bust is projected to be sold.
It is important to note there are various stages to a residential real estate transaction in South Florida.
A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.
As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled.
The CondoVultures.com new condo sales report is based on completed transactions where a deed is recorded and taxes paid as a result of the sale.
Condo Vultures® LLC is a real estate consultancy and marketing company based in the 225 Midtown Building at 225 NE 34th St., Suite 209B, Downtown Miami, Florida, 33137. Condo Vultures® LLC can be reached at 800-750-0517.
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