Last year, we saw the drop of condo sales in almost all neighborhood except in the Downtown and South Beach area. In Brickell, the sales has dropped by an average of 5% while in Edgewater, it dropped by an average of 9%. This trend has been caused by the high inventory of luxury condos available for sale. In fact, there is currently a four years supply of luxury condos in the market.
This high inventory also contributes to a growing concern to real estate developers. There is a difficulty of selling new pre-construction units. Developers are postponing their projects in hope for a better market.
However, there are some developers who are taking it with a stride. OKO Group launched the sales of UNA condo, a pre-construction condo project in Brickell last March. Another project named Palazzo Della Luna condo in Fisher Island also went up for sale recently.
Other pre-constructions are already along the way. The One River Point condo which was launched back in 2015 is expecting to pour the foundation at the end of this year. The sales for this project has been slow as stated by the developer, the KAR Properties. The Estates at Acqualina condo, which is another pre-construction project has also seen slow growth but just recently, the developer issued a statement that they had a record-breaking of $80 million of sales in 14 days.
Despite that, developers are lukewarm in proposing new projects. The next cycle is predicted to be in 2020 but the current land price is discouraging them. The price is set too high when the market is in fact, slowing down. The developers, however are still counting their blessings because this end –of-cycle hard times are better than the crash-and-burn recession back in 2008.