New Condo Inventory in Ft. Lauderdale Significantly Reduced From 2008 Peaks of 5,100 Unsold Units

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According to a new report from Condo Vultures, less than two percent of the nearly 5,100 condos created in the Downtown Fort Lauderdale and Beach market during the South Florida real estate boom remain unsold as of March 31, 2011.

The unsold inventory was reduced even further between January and March of 2011 when buyers acquired 76 developer units for nearly $10.7 million, according to an analysis based on the Condo Vultures report.

A super majority of the units that transacted in the first quarter of 2011 were in the Village East condominium conversion, where a 68-unit bulk deal traded for $7.65 million in February. The other developer units to transact in the first quarter of 2011 were located in the Coconut Grove Residences on Fort Lauderdale Beach, according to an analysis of Broward County records.

"Downtown Fort Lauderdale and the Beach is arguably one of the most stable coastal condo markets in the tricounty South Florida region based strictly on remaining unsold developer units," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based Condo Vultures LLC. "As a result of a somewhat anti-development city commission during the boom years, several new condo projects planned for Downtown Fort Lauderdale and the Beach were never constructed. Many of the units that ultimately were built ended up coming online right as the real estate crash was beginning.

"Buyers with preconstruction purchase contracts at the time opted to go forward with their transactions rather than lose their deposits of typically 20 percent." 

In the Downtown Fort Lauderdale and Beach market, developers constructed nearly 5,100 new condominium units during the last real estate boom, increasing the existing inventory by 66 percent in less than a decade, according to the report.

The 298-unit condominium-hotel project formerly known as the Trump International Hotel & Tower - which has yet to begin sales - on Fort Lauderdale Beach Boulevard is not included in the total.

Since 2003, developers constructed and converted 47 projects of 15 units or more in a stretch of central Fort Lauderdale from Sunrise Boulevard south to State Road 84/Southeast 24th Street, Northwest 7th/Southwest 4th Avenue east to the Atlantic Ocean, according to research compiled for the soon-to-be-released Condo Vultures® Official Condo Buyers Guide To Fort Lauderdale™.

The surge in new condo construction increased Fort Lauderdale's total inventory in the Downtown and Beach neighborhoods to nearly 12,800 units located within 180 projects that feature a combined 1,500 floors of residential living, according to the study.

As of March 31, 2011, developers had sold nearly 5,000 units for nearly $2.3 billion in sales. The average sales price for a boom-era unit is $358 per square foot, according to the report.  

The average price per square foot for developer units decreased in the first quarter of 2011 when a bulk buyer paid an average of $121 per square foot for more than 63,000 square feet of space in a condo conversion on the 17th Street Causeway.

The bulk buyer has since begun to resell the units at an average price of $177 per square foot, according to Condo Vultures.

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. 

A noteworthy fact from the Fort Lauderdale research is the focus that developers have had on large units with multiple bedrooms in eastern Broward County dating back to the 1950s.

More than half - 52 percent - of the overall units in Fort Lauderdale's Downtown and Beach neighborhoods have two bedrooms. An additional 11 percent of the inventory is comprised of three bedrooms, and one percent has four bedrooms or more. Studios and one-bedrooms account for the remaining 36 percent of the total condo inventory, according to Condo Vultures.

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