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Resales in South Florida undergo a decline as new constructions blossom

05 Sep

miami-preconstruction-condos-resaleWe are currently observing an increase in the resale inventory of South Florida’s condos. At the same time, almost 10,100 other condos are under construction. Does that mean that these new condos are the number 1 competitors of the resale market?

We are currently observing an increase in the inventory of Miami existing condos. At the same time, almost 10,100 other condos are under construction. Could the preconstruction market in Miami steal sales from the existing condo market?

70 condo towers are under development. This will offer 9,300 new units in the Miami and Fort Lauderdale market. This preconstruction frenzy seems to be done at the expense of the resale market.

Miami-Dade County is the most representative example: 54 towers are being built right now… and it goes hand in hand with a decrease of 9% in the condo resales! Indeed, 7,000 deals were signed in 2013 as compared to 6,358 this year! The condo resale supply in Miami now approximates 9 months, which is high since a healthy market should not average more than 6 months of inventory. This could also mean that we are transitioning back to a buyer’s market…

In addition, ultra-luxury constructions keep moving forward such as the Faena House, the Surf Club, the Oceana Bal Harbour, and the newly-launched Aria on the Bay. Some of them such as the Armani condo are 85% sold after 2 months. Other 170 new planned towers with a total amount of 25, 050 units are still waiting to start their construction. All these new condos that are being built mainly depend on buyer deposits which represent 50% of the presale price.

As a conclusion, we can say that the preconstruction market in Miami is definitely diverting some prospective buyers away from the condo resale market.

 

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3 Comments

Posted by on September 5, 2014 in News

 

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3 responses to “Resales in South Florida undergo a decline as new constructions blossom

  1. Clint Schneider

    October 15, 2014 at 12:46 am

    Miami has become the hub of new construction. Urbanization in Miami is fastest as ever and buildings such as Blue Condominium Miami and IconBay are growing and these has impacted the resale of the properties and real estate in a bad way. As these condos are very cheap people are going to buy new ones than resale properties.

     
  2. artmos331

    October 19, 2014 at 9:47 pm

    A recent report on condo number in the pipeline are provocative … some interesting numbers and conclusions too p.41-4

    http://miamidda.com/pdf/IRR_MDDA_ResMktStudy_FinalWeb.pdf

     
  3. elizabethdiamond123

    May 30, 2015 at 3:19 am

    Miami Real Estate Blog is very nice…

     

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