As prices on Miami condos have dropped (Miami Condo Buildings slashing prices as much as 50% ), Miami is seeing a notable rise in the number of condo sales! The real estate market in Miami appears to have turned!
The New York Times reports on July 29,2009, “Despite a vast oversupply of new condos in downtown Miami, sales have been brisk lately… The reason? Prices have been cut in half…” Miami Condo Sales are UP says New York Times writer Terry Pristin … and what she is reporting, we too are seeing first hand: “Square Feet: As Prices Plummet, Condo Sales in Miami Perk Up”.
Condo sales are indeed up, and multiple offers on Miami real estate are a refreshing change from what Miami has seen over the past few years! Miami has witnessed an obvious oversupply of newly built condos, in recent years. Literally within the past 1/2 decade, more than 23,000 new condo units have sprung up, dramatically altering the skyline of downtown Miami and Brickell. That glut of over-development remains, at least in part, with close to 10,000 condos remaining on the market (unsold!) at the start of summer, 2009.
That being said, the feared “bulk purchases of condo units by investors” has yet to impact Miami as many thought it might. Bulk purchases of condo units at wholesale prices have been rather “building specific”. Although investors did swoop in from around the globe, attempting to negotiate bulk purchases with condo developers on Miami Beach, in Brickell, Downtown Miami and Downtown Dadeland, relatively few of those bulk negotiations were successful. Contrary to the forecasted “hundreds” of buildings thought by many to be at risk for bulk buy-outs, the numbers actually succumbing to those bulk buy outs have been rather more conservative . I’m estimating perhaps thirty to forty buildings succumbed to discounted wholesale pricing bulk buy-outs.
The vast majority of all condo sales are actually selling at current market retail pricing…. Yes, current market pricing is definitely lower than condo pricing per square foot, even a year ago. As a result, Miami condos are moving and selling… priced at “current market prices” , and buyers still sitting on the fence may be waiting too long! Price per square foot in Brickell/Downtown is now settling at slightly above $200 a square foot on brand new construction high-rises, providing some really good deals for buyers. No doubt, there are still numbers of buildings and individual units selling for WELL over that… particularly the well-established older buildings … for example the Bristol and the Santa Maria, to name just two.
Buyers are literally lining up at the doors these days to own new condos in new buildings says Vicki Restivo, Realtor with Esslinger Wooten Maxwell Realtors in Miami: “While it’s by no means the “buying frenzy” Miami saw during the pre-construction phase of the condo growth spurt of several years back (where lines literally went down the block and around the corner for pre-sales at 500 Brickell and The Plaza on Brickell) … buyers who dillydally are missing out on contracts as other ready and willing buyers move-in and grab up contracts. I’ve seen it first hand on several occasions. Earlier this summer I was working with international buyers looking for waterview property on Brickell. Fully aware of the market and the value, and going in with eyes WIDE open, those buyers were primed and ready… and didn’t hesitate when we found the ‘right’ condo. We submitted our offer within minutes of having seen a handful of units on Brickell, after selecting THE one that worked best for them. Another (slower) prospective buyer and realtor saw the same unit that same morning… but they went for a quick bite to ponder their options while we sat down and immediately drew up an offer. In the time-frame of a mere hour we’d secured the condo. ( The other realtor and his group returned after lunch to buy it, but we’d already negotiated it out and sealed the deal.) That story is by no means an isolated one. Three other times that same week (that I’m personally aware of) one buyer procured a condo literally minutes ahead of another contract being presented. Condo sales are definitely “perking up” (to use Terry Pristin’s observation !)”.
There is unquestionabley a glut of oversupply of new condos in Brickell and in downtown Miami. Some buildings are tough to get financing in, and therefore require buyers who are not reliant upon financing . Criteria for financing hinges upon 1) the number of units sold versus unsold, 2) the number of owner occupied units (primary residences and second or vacation homes) versus rental units owned by investors and leased or rented out to tenants, 3)the number of owners 30 days or more in arrears on their association fees, and 4) the number of short sales and foreclosures in the building.
A handful of new condo buildings already have Fannie Mae approval, allowing buyers to procure lender financing. Sales are up, and notably so. Prices dropped at 500 Brickell by 30% this past spring. One bedrooms in 500 Brickell (which, by the way, is Fannie Mae approved) can be had for as little as $200,000.00 … (or slightly less, if having a high floor with a view isn’t a “must” for you!). Although price per square foot is often referred to, there is a definite correlation between price and the FLOOR the unit is on (as generally ‘height’ corresponds to ‘view’!) Two bedrooms are selling as low as the mid $200’s (upward) in some buildings… depending upon location and view. The Plaza on Brickell has some very competitive pricing and offerings. One tower at the Plaza on Brickell is already Fannie Mae approved, and the other tower is expected to be so, literally any day now.
Prices don’t seem to me to be dropping any further… at least not this week. Condo-pricing is buyer-friendly right now, and units are moving off the shelves at a consistent clip. Buyers (for the most part) no longer seem to be on the fence. They are poised and quick to make their move as the market seems to be showing signs of recovery…. hence, condo sales are up. According to real estate professional Ron Shuffield, President of EWM Realtors (owned by Warren Buffet) , condo sales in newly constructed buildings increased by over 50% since the spring of 2009.
The NEW YORK TIMES article published July 29,2009 by journalist Terry Pristin gives valuable insight into Miami’s current condo market. For a link to that article , click here. Having a pulse on the Real Estate Market gives you insight and ammunition! Your thoughts and insights are welcomed on MiamiRealEstateCafe’s Blog. Feel free to comment and/or ask questions. If you, or someone you know, are looking to buy real estate in Miami, Alexandra and Vicki Restivo at EWM Realtors are never too busy for any of your referrals!