Downtown Miami Enjoys 103% Year-over-year Increase in Condo Sales in Q2
Posted by Michael Gerrity 07/21/10 12:11 PM EST
(MIAMI, FL) — Condo Vultures reports this week that an average of nearly 500 new condos traded per month in Greater Downtown Miami between April and June 2010, representing a 105 percent increase compared to the 241 units per month average in second quarter of 2009.
Transactions for nearly 1,500 units with 1.8 million square feet of saleable space generated a gross sales amount of $584 million, or $333 per square foot. The flurry of sales activity has reduced the number of new condos under developers’ control in Greater Downtown Miami to less than 5,100 units, according to the report.
The unsold new condos represent about 23 percent of the total inventory constructed in a 60-block stretch of Greater Downtown Miami between 2003 and 2010. A year ago in July 2009 about 40 percent of the new condos in the same submarket were unsold."In the last year, the landscape of the Greater Downtown Miami new condo market has begun to take shape," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based Condo Vultures LLC. "Nearly 3,800 new condo units have traded in the last 12 months as developers have cut pricing in some cases as much as 51 percent. Based on our early research, four-out-of-every-five-condo deals is being transacted in all cash.
"The preponderance of all-cash buyers raises the question of how many of the new owners actually plan to live in the units opposed to renting the condos out to tenants."
In the first six months of 2010, more than 2,200 new condo units have changed hands in the 82 new projects constructed since 2003 between the Julia Tuttle Causeway south to the Rickenbacker Causeway, Interstate 95 east to Biscayne Bay, according to the report.
Of the 82 Greater Downtown Miami projects constructed in the last seven years, 38 condominiums are completely sold out and an additional 19 projects have sold between 75 percent and 99 percent of their units. An additional four projects have sold between 50 percent and 74 percent of their inventory.
Of the remaining 21 new projects, there are still seven condominium complexes with less than five percent of the units sold. The remaining 14 new projects have sold between 10 percent and 38 percent of their respective inventory, according to the report.
The largest transaction of the second quarter of 2010 occurred in May when an entity controlled by construction lender HSBC Bank USA took ownership of 870 units and nearly one million square feet of saleable space in two towers in the three-tower ICON Brickell complex through a $342 million deed-in-lieu-of-foreclosure from the project’s developer, the Related Group, according to Condo Vultures.
If HSBC Bank USA’s 870 units are omitted from the second quarter totals, buyers still acquired more than 610 new units in the second quarter of 2010 compared to about 380 units for the same period in 2009. This represents a 61 percent increase on a year-over-year basis, according to the report.
There was one other bulk deal to occur for a package of new condos in Greater Downtown Miami in the second quarter of 2010.
In April, an Argentinean private equity group purchased 10 units with 10,450 square feet in the Met One condo project in Downtown Miami at a price of $2.75 million, or $263 per square foot.
Overall, nearly 17,200 new condo units have sold in Greater Downtown Miami since 2003 for $6.7 billion, or $376,500 per unit. The pricing works out to an average of more than $336 per square foot, according to Condo Vultures.
