Last week, the New York Times featured a piece about a slight upturn in fortunes for the condo market in Miami - specifically the ever-popular Miami Beach condos.
In particular, the Carribbean complex on Miami Beach (located on Collins Avenue, but in reality slightly north of what would actually be called Miami Beach) had buyers for all of its units - that's 103 of them - last year. Only 14 of these buyers went on to complete/close their sale, with everyone else walking away from their deal, losing their deposits in the process. As such, the developers of the building incurred heavy losses - though another company has now taken over control of the development. Now, at substantially lower prices, units are shifting and then some - only 15 condos remain unsold. Originally, units were being sold for around $1,100 per square foot, but now are going for around $600 per square foot.
Better yet, the majority of purchasers intend to live in the condos themselves, rather than being short-term investors. Such buyers are interested in prime locations such as Miami Beach (especially close to the famous South Beach) rather than other places with a surplus of condo units - such as the downtown area.
It is in this area that a new study, mentioned in the NY Times article, reveals that although 1,000 condo units sold between May and December 2009, most were to investors. Of the 22,000 units built there since 2003, an amazing 7,000 still remain unsold. (Though apparently 700 more have been sold since the study was completed.)
It's the downtown area that, despite a great deal of development and construction over the last decade or so, still is lacking something. The over-construction of these condo units hasn't helped - though some owners are now looking to rent out their properties (with some renters able to get amazing deals on brand new apartments - there's something to think about if you're interesting in renting), which has seen occupation rates in the area rise from 68% to 74%. These new residents have also drawn more retailers to the area, which is helping to establish it and make it more vibrant - and less of a ghost town.
If you're interesting in seeing what a downtown condo development looks like, take a look at the famous
Icon Brickell, which is mentioned in the article. Made up of two buildings, plus a third residence/hotel, there's a whopping 1,646 units here - though only 125 units had sold by the end of 2009, with a further 199 sold this year, according to the New York Times. Some units have apparently been snapped up for less than $300 per square foot, which I can't imagine is what the developer had in mind.
The article mentions that condo prices in Miami Dade county have fallen by 51% from 2007, when the median price of a unit stood at $275,000. Though units are being snapped up, as described in the article, the concern is that once prices do start rising to any considerable extent, units owned by investors may flood the market - keeping prices low. It may be a while until the market fully recovers.
Though once again, if it is a bargain that you're after...now may be the perfect opportunity to snap something up.
