With the preconstruction frenzy going on, let’s take a look at the impact of such new developments in Miami Beach. Indeed, new condo towers arise and progressively impact the condo resale scene. Whether they are called Marea, 321 Ocean, One Ocean, Glass, Faena House, or the Edition they are definitely reshaping Miami Beach’s landscape. The question is: are they truly adding value to the famous district or cannibalizing the current market?
These construction dynamics have pros and cons. Knowing that all the Miami Beach preconstructions have sold out their units in a few months, should they appear as a threat to the current market?
On one hand, the recent surge in preconstruction projects seems to have hindered the current resale market in South Beach. Alongside with bringing a wave of freshness and novelty, it highlights an increasingly expensive need for renovation for the existing condos. As compared to the beautiful new projects, the famous condos of South Beach tend to look older and cheaper. The resales are becoming less attractive: hence the need to start updating as the Yacht Club at Portofino is doing for its hallways and pool. The Murano Grande has also totally renovated its pool deck, whereas South Pointe Tower focuses on its hallways and Continuum South has remodeled its lobby.
Moreover, as they rise up to the sky, these constructions start obstructing the immaculate views from the existing condos, thus it could trigger their values to go down! Indeed, the Glass building sits on the way of the Yacht Club’s view and the market value of the lower units at the Apogee is slightly affected by the obstruction from the Marea! Be reassured though, because it is now almost impossible to find a vacant lot in Miami Beach.
Finally, these additional preconstructions could generate a heavier traffic and accessibility issues during the high season. Will the Miami Beach’s roads handle it?
On the other hand, however, complaining about traffic is not utterly fair. It only symbolizes the new power of attraction that these constructions are responsible of. It is a great revitalization tool for the district’s commercial activity, thus bringing high end stores and restaurants to town – such as Porfirio’s and il Mulino – alongside with the associated international clientele! Seventy percent or more of these new preconstruction buyers are buying cash which is a guarantee of their ability to close.
Moreover, preconstructions have a positive impact on overall condo prices to the extent that they work as a comparable. Marea, Glass, One Ocean and 321 Ocean started selling minimum at $1,500/sqft so that is definitely impacting the overall prices. Indeed, because they started sales at higher prices, it makes the real estate market in South Beach go up to keep up with the trend! For example, as compared to last year, the prices of the Continuum South condos have rose by 48%. Overall, the price increase in South Beach has been of 22%. Whether it is a direct impact from the preconstruction frenzy or not is still questionable though.
Finally, preconstructions also contribute to embellishing the location, location, location. Indeed, these amazing new buildings tend to give an even richer and more luxury feel to the area. This has a lot to do with the world-renowned architects that come here and shed their sense of aesthetics on breathtaking designs. Who wouldn’t want to live in a Moulin Rouge atmosphere? The residents of Mid Beach will thank Alan Faena and Baz Luhrmann for the revitalization of their neighborhood. Who would not take pride in owning a condo from starchitect Enrique Norten’s unit at 321 Ocean or a piece of the garden of Eden by Enzo Enea in the Marea condo?