In an unusual twist, condo sales in Miami-Dade County have plunged off the deep end, with supply growing and developers left holding completed units they can’t sell. The Miami Association of Realtors reports that sales are down 25 percent over the last three years and inventory has increased 90 percent since 2013. The catch in all of this? Condo prices have actually increased 6.3 percent over the same time a year ago.
A glut of pricey condos has hit the market in Miami-Dade, sparking a sales slowdown. According to Wolf Street, the square-foot prices of projects with more than 2,600 units in the Brickell area of Miami peaked in 2014 and 2015 and have since dropped between 10 percent and 16 percent. Three of the projects were completed in 2008 and were swept up in the foreclosure crisis.
One example is 1050 and 1060 Brickell, which peaked in 2014 and the average price per square foot has dropped 16 percent since. Axis Brickell, completed in 2008, has seen its average price per square foot drop 11 percent during the same time. These prices exclude units below 10th floor and penthouse units.
The waterfront Jade Brickell, dating to 2004, currently has 37 units listed. With 20 units sold over the course of a year, that is a supply of about 22 months, according to Wolf Street.
The Miami Association of Realtors has offered some good news in March for the condo/townhouse market. Sales increased 2.3 percent to 1,327 — breaking the 15-month run of declines — as the median sales price grew 7.4 percent to $225,000. Active listings surged 10.5 percent and the supply of inventory reached 13.8 months.
While median sales prices for condos in mainland Miami-Dad increased
There have been a number of drivers to these trends, including a stronger U.S. dollar making real estate more expensive for foreign purchasers, a shift in pricing momentum, new supply providing competition and a surge in resale activity. Peter Zalewski of Cranespotters.com cautions that any gains in Miami’s condo market may only be temporary.
“If these statistics are true, chances are it’s an anomaly more so than a trend. Miami-Dade County bills itself as the gateway to Latin America, so when buyers from those countries come to South Florida, Miami-Dade is the biggest benefactor. But with the anti-immigration vibe being put forth by the Trump administration, foreign investors are feeling skittish. I would be shocked if this trend were to continue going forward.”
Jay Parker, CEO of Douglas Elliman Florida, told the Orlando Sun-Sentinel that while the $1 million-plus inventory is growing, levels are not at an alarming level.
“We are, without question, seeing a tremendous amount of velocity in the luxury sector. There’s no doubt in my mind that buyers are trying to capitalize on what is still a very opportunistic market.”