The WPJ
Residential Real Estate News
1 in 4 New Condos in Sunny Isles Beach Florida Remain Unsold
(MIAMI, FL) -- More than 24 percent of the 6,300 new condo units built or converted in the barrier island city of Sunny Isles Beach during the boom years in South Florida remain in the hands of developers, according to a new report from Condo Vultures.
Sunny Isles Beach, an oceanfront city east of Aventura in Northeast Miami-Dade County, is home to the second largest concentration of new condos to be built in South Florida during the go-go days of the last real estate boom.
Today, more than 1,500 units remain unsold and still in the hands of the developers, according to Condo Vultures newly released Condo Buyers Guide to Sunny Isles Beach.
"The Sunny Isles Beach market has experienced many of the same challenges that Greater Downtown Miami - where nearly 23,000 new units were constructed between 2003 and 2010 - is going through," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based Condo Vultures, LLC. "Much like in Greater Downtown Miami, buyers are willing to purchase today in Sunny Isles Beach but only at the right price. In Greater Downtown Miami, the right price is moving toward $250 per square foot.
"In Sunny Isles Beach, the right price is working out to be about $350 per square foot for a unit in an oceanfront project."
Developers created 27 condominium buildings in Sunny Isles Beach between 2003 and 2010, selling 76 percent of the 6,300 units for $3.3 billion, or $712,000 per property, according to Condo Vultures.
Of the 27 new Sunny Isles Beach condominiums, eight buildings are completely sold out and another eight projects have sold at least 90 percent of the total condos. There is a huge fall off after that.
Of the remaining 11 new Sunny Isles Beach projects, only one condominium has sold between 60 percent and 69 percent of its inventory. Three condominiums have sold between 50 percent and 59 percent of their inventory. Three more projects have sold no more than 32 percent of the total inventory. There are four condominiums that have not closed on a single unit, according to Condo Vultures.
In the 13 years since city incorporation, Sunny Isles Beach has dramatically changed from a sleepy motel community on the sand in Northeast Miami-Dade County to a destination city with dozens of luxury high-rise condos fronting the Atlantic Ocean.
For more than 50 years, Sunny Isles Beach was always a place where northerners could spend a few days, weeks, or months during the winter for a reasonable price at a independent hotel, a time share or in recent years a modest condominium project.
Everything changed in 1997 when Sunny Isles Beach residents created their own city with their own zoning rules, dropping Miami-Dade County guidelines of low-rise projects.
The more generous height limits combined with the building boom environment, and suddenly Sunny Isles Beach - a city 2.5 miles long with 16,000 residents - has more than 18,000 condo units including the 6,300 new units. Many of the units are located in skyscrapers lining the ocean side of Collins Avenue or A1A, offering thousands of owners unobstructed ocean views.
Developers from around the world flocked to Sunny Isles Beach to participate in a building boom that resulted in 27 projects since 2003. Overall, Sunny Isles Beach has nearly 90 condominium projects ranging in size from 33 units up to more than 600 units.
South Florida's condo crash that has been so well documented internationally has had mixed results in Sunny Isles Beach. The strong demand for new oceanfront units has helped to keep pricing somewhat stable while pricing on older product with no views have tumbled.
The dramatic drops and steep discounts are primarily concentrated across Biscayne Bay in Greater Downtown Miami where 83 towers with nearly 23,000 new condo units were built in an area that had developer 11,500 units in 40 years prior, according to the Condo Vultures.
Some 7,300 new units - or 34 percent of the new units - in Greater Downtown Miami were still unsold by developers through Dec. 31, 2009.
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