As I started to gather the statistics on 2013, I noticed that the South Beach condo sales in volume decreased compared to 2012. The most impressive figures are at the Continuum South (- 47%), at the Waverly (- 44%) and at the Murano Grande (- 40%).
What could be the cause for this drop in the South Beach condo sales?
First let’s check if a shortage of inventory could explain the decrease in sales. A market that is balanced between buyers and sellers typically offers 6 to 9 months of supply. On South Beach, the Waverly, the Floridian, the South Pointe Tower and the Grand Venetian have currently less than 6 months of supply. However, their sales increased in 2013. Therefore, it’s not a lack of inventory, which can explain lower sales.
Then, could it be the impact of high prices that would reduce the volume of sales? Prices per sqft increased of 19% on average in all the condos. They even reached 41% at the Murano Grande ($968/sqft), 32% at the Murano Portofino ($1,256/sqft) and 28% at the South Pointe Tower ($813/sqft). So the sales’ decrease can mostly be explained by an overpriced inventory.
Another interesting figure to highlight is the quality of the available inventory. For example, if we look at the Yacht Club, only one third of the units for sale are located on the bay side, which is the most appealing side of the building. We find ourselves in the same situation at the Floridian Tower where only 4 out of 14 units for sale are on the bay side.
To conclude, the decrease of sales in most of the condos in South Beach is closely linked to an high priced seller’s market and to a lack of prime inventory.