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August 4, 2009

P R O P E R T Y   S E A R C H

R E S T I V O – H E C H T M A N    T E A M

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!  MiamiSkyline 














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!

Who Is Buying In Florida?

Who Is Buying In Florida?

Relationships are essential. The2020 Profile of International Residential Real Estate Activity in Florida presents information from Florida REALTORS® members regarding residential transactions with international clients closed during the 12-month period of August...


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