Downtown Miami Condo Prices Spike 14% in First Quarter 2011

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According to a new report from Bal Harbour, Florida-based Condo Vultures, buyers paid an average of 14 percent more for new units in Greater Downtown Miami - in the epicenter of Florida's condo crash - in the first 90 days of 2011 on a year-over-year basis compared to the same three-month span in 2010.

As the prices for new developer units increased to $348 per square foot in 2011, the average number of sales dropped by 54 percent to 111 transactions per month in the first quarter.

A year earlier in the first quarter of 2010, buyers purchased an average of 239 new condos per month when prices averaged $306 per square foot, according to the report based on an analysis of Miami-Dade County records.

"Bulk buyers, lenders, and those few developers still involved with Greater Downtown Miami's unsold condo inventory have been working - and marketing - diligently for the last six months to increase the average market price to about $350 per square foot," said Peter Zalewski, a principal with Condo Vultures LLC. "As Greater Downtown Miami heads into the humid summer months after a busy winter tourism season, the question is whether sellers will stand firm on their sales price objectives or roll back prices to generate more transaction velocity given the 29-month supply of unsold condo product."

Besides the unsold developer inventory in Greater Downtown Miami, there are more than 1,300 condos built during the boom currently on the resale market and more than 1,000 units being marketed by bulk buyers attempting to resell condos to individual investors at a premium.

Greater Downtown Miami is a 60-block stretch from the Julia Tuttle Causeway south to the Rickenbacker Causeway, Interstate 95 east to Biscayne Bay. Greater Downtown Miami is comprised of the neighborhoods of the Brickell Avenue Area, Downtown Miami, and the Biscayne Boulevard Corridor.

Developers constructed nearly 22,250 condos during the real estate boom beginning in 2003 in Greater Downtown Miami. In the four decades prior to the boom, developers had created some 11,500 units in the same market.

As of March 31, some 3,200 new condos created during the boom remained unsold. The unsold units are located in three-dozen projects out of the 84 projects that were developed since 2003 in Greater Downtown Miami.

The Mint condominium on the north bank of the Miami River in Downtown Miami experienced the greatest number of transactions in the first quarter of 2011 with 69 sales. The Marquis on Biscayne Boulevard in Downtown Miami ranked second with 61 transactions, and the Infinity at Brickell condominium in the Brickell Avenue Area ranked third with 51 transactions.

The Epic West condominium at the base of the Brickell Avenue Bridge in Downtown Miami ranked fourth with 40 transactions in the first quarter of 2011.

New units sales at a pair of condominiums - the 900 Biscayne Bay and the ICON Brickell West Tower where the Viceroy Hotel is located - tied for the No. 5 ranking with 38 transactions each in the first quarter of 2011.

Going forward, the greatest number of unsold new condos are located in the Brickell Avenue Area neighborhood where there are more than 1,200 units remaining as of March 31, 2011, according to the report.

The unsold units represent 12 percent of the more than 10,050 new condos created in the Brickell Avenue Area submarket since 2003.

The highest concentration of unsold units is located in the Biscayne Boulevard Corridor neighborhood where 19 percent of the more than 5,200 units built during the boom remain unsold. 

In Downtown Miami, the nearly 1,000 unsold condos represent 14.4 percent of the nearly 7,000 condos created during the real estate boom, according to Condo Vultures.  

 

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