For a second consecutive quarter, about 600 new condos in the popular South Beach neighborhood of Miami Beach remain unsold from the last South Florida real estate boom-and-bust cycle as developer units sales slowed dramatically in the fourth quarter of 2012, according to a new report from CondoVultures.com.
Buyers purchased less than 10 new condos for a combined $9.9 million between October and December of 2012 compared to more than 20 units for more than $16 million during the same three-month period in 2011, according to an analysis based on Miami-Dade County records.
As of Dec. 31, 2012, developers in the South Beach condo market have sold about 89 percent of the nearly 5,600 units created since 2003, according to an analysis based on the Condo Vultures® Official Condo Buyers Guide To South Beach™.
“Based on the latest research, a bit of a disconnect appears to be occurring between developers and buyers in South Beach,” said Peter Zalewski, a principal with the Greater Downtown Miami-based real estate consultancy Condo Vultures® LLC. “As the South Beach – and tricounty South Florida regional – condo market continues to show signs of improving, many developers with unsold units are attempting to raise prices higher and higher. Buyers in South Beach appear to be flinching – at least in the fourth quarter of 2012 – at the newly introduced pricing schedules.
“Going forward, we intend to closely monitor how developers with unsold boom-era condo units proceed in a market where more than 14,500 new condo units have already been proposed for the South Florida coastal region.”
CondoVultures.com is scheduled to profile condo trends in the fourth quarter of 2012 in the 10 largest coastal markets in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties beginning the week of Jan. 14, 2013.
The Condo Vultures® Market Intelligence Report™ is scheduled 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.
South Beach is a 24-block long neighborhood in the barrier island city of Miami Beach that stretches from South Pointe Drive north to 24th Street, the Atlantic Ocean west to Biscayne Bay, according to the Condo Vultures® Official Condo Buyers Guide To South Beach™.
Developers created 37 projects with nearly 5,600 units in the South Beach neighborhood during the South Florida real estate boom beginning in 2003.
Prior to the real estate boom, South Beach – a historical district with a large number of Art Deco, low-rise structures – had 110 condo projects with 10,800 units.
As of Dec. 31, 2012, buyers have purchased about 4,950 new condo units from the last real estate boom for about $3.45 billion, representing an average price of nearly $600 per square foot, according to the report.
In the fourth quarter of 2012, buyers purchased developer units in three projects – Continuum On South Beach, Mondrian South Beach, and the W South Beach – at an average price of more than $730 per square foot, according to the report.
In addition to the unsold developer units, nearly 240 condos – created since 2003 – are on the resale market at an average asking price of more than $1,190 per square foot in South Beach as of Jan. 24, 2013, according to the licensed Florida brokerage CVR Realty™.
In 2012, buyers purchased more than 300 South Beach condo units – created since 2003 – on the resale market at an average price of nearly $960 per square foot, according to data from the Florida Realtors association.
The condo resales do not reflect any deals that may have transacted without being marketed on the Multiple Listing Service.
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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