Over 1,000 New Condos Remain Unsold in Sunny Isles Beach, 37% in Trump Named Projects

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(MIAMI, FL) -- According to Bal Harbour, Florida based Condo Vultures, more than 1,000 new condominium units - 37% in projects named after New York real estate developer and possible presidential candidate Donald Trump - created or planned during the real estate boom remain unsold in the South Florida city of Sunny Isles Beach as of March 31, 2011.

The unsold inventory remains even after buyers purchased 69 units for nearly $68 million between January and March of 2011 -  the peak of South Florida's winter tourism season.

As encouraging as the first quarter of 2011 new condo sales velocity appears for developers, the transaction pace is down compared to previous years despite little change in the price per square foot.

In first quarter of 2010, buyers purchased 105 sales for $102 million. A year earlier during the same time span in 2009, buyers purchased 105 sales for $110 million, according to an analysis of Miami-Dade County records.

"Sunny Isles Beach is proving to be an anomaly when compared to other Miami-Dade County condo markets with an overhang of new inventory," said Peter Zalewski, a principal with Condo Vultures LLC. "In Greater Downtown Miami and the South Beach neighborhood of Miami Beach, the sales velocity is closely tied to the average transaction price per square foot. In Sunny Isles Beach, the average sales price per square foot has remained relatively steady yet the number of transactions has decreased by more than one-third.

"Going into the summer season, it is unclear how difficult it will be to sell the last 16 percent of the new condo inventory created in Sunny Isles Beach during the boom."

In Sunny Isles Beach, buyers are purchasing an average of 23 new condo units per month in 2011.

At the current pace, the Sunny Isles Beach new condo market has about 44 months of inventory remaining, according to the report.

As of March 31, 2011, the largest chunk - nearly 370 units - of unsold, new condos in Sunny Isles Beach are located in one of the six towers bearing the Trump name, according to an analysis of Miami-Dade County records.

Not surprising, the Trump-named projects also represent the largest percentage of new condo sales in the first quarter of 2011 with 47 transactions, according to government records.

At the most active project - Trump Tower III - right now, buyers purchased an average of 11 new condo units per month in the first 90 days of 2011, according to Condo Vultures.

This year's sales activity at the Trump Tower III is up slightly from an average of 10 transactions per month in the year 2010 at the oceanfront project on Collins Avenue, or State Road A1A.

At the current transaction pace, the 271-unit project would be sold out in about 20 months. The U.S. presidential election - for which Trump is considering running - is some 19 months away, scheduled for November 2012.

A factor in the increased sales activity at the Trump Tower III is the $9-per-square-foot price reduction implemented in 2011 at the last Trump-named project to be delivered in Sunny Isles Beach, industry watchers said.

Sunny Isles Beach is a 40-block stretch from the city of Golden Beach boundary south to Haulover Park, Biscayne Bay east to the Atlantic Ocean. Sunny Isles Beach is divided up into three neighborhoods separated by causeways: North, Central, and South.

Developers constructed 27 projects with nearly 6,400 units in the Sunny Isles Beach market since 2003. Prior to the boom, developers had built nearly 60 projects with nearly 12,000 units in Sunny Isles Beach.

As of March 31, 2011, developers had sold 84 percent of the Sunny Isles Beach inventory created since 2003.

In 2010, developers sold 422 units - nearly seven percent of the inventory built during the boom - at an average price of more than $501 per square foot. A year earlier in 2009, developers sold 624 units at an average price of $446 per square foot.

Developers are currently on track to sell 276 new units in Sunny Isles Beach in the year 2011 at an average price of $499 per square foot.

 

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