We 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.