South Beach: Foreign Buyers Spur Jump In New Condo Sales Published on 1/24/2012 4:07:00 PM
An average of 26 new South Beach condo units transacted every month in 2011, representing a 150 percent increase on a year-over-year basis compared to sales in 2010 in the internationally known neighborhood of Miami Beach, according to a new report from CondoVultures.com.
Buyers acquired more than 300 units - 159 units of which changed ownership as part of a bankruptcy auction - for nearly $248 million between January and December of 2011. Compare this to previous years when nearly 125 developer units traded for $136 million in 2010 and nearly 110 new units sold for $130 million in 2009, according to an analysis of Miami-Dade County records.
Despite the increased sales velocity, more than 960 new condos remain unsold in the South Beach neighborhood of Miami Beach from the South Florida real estate boom, according to an analysis based on the Condo Vultures® Official Condo Buyers Guide To South Beach™.
"As international buyers flood into the South Florida real estate market, developers are reluctant to reduce prices on new condo units in South Beach," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "As a result, new unit sales in South Beach are increasing but just not at the same speed being experienced in other more affordable markets such as Greater Downtown Miami or Sunny Isles Beach. At the 2011 sales pace, the unsold developer units in South Beach could require an additional 38 more months to sell out.
"Despite the unsold inventory, developers are already in the governmental approval process to build two newly proposed condo projects - the Saxony and the Palau At Sunset Harbour - in Miami Beach."
CondoVultures.com is scheduled to profile new unit sales by project in the fourth quarter of 2011 in the seven largest coastal condo markets in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties.
Since the week of Jan. 16, the Condo Vultures® Market Intelligence Report™ has been publishing a seven-part weekly series analyzing new condo sales trends in Greater Downtown Miami, South Beach, Sunny Isles Beach, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island.
South Beach is a 24-block long neighborhood in the barrier island city of Miami Beach that stretches from South Pointe Drive north to 24th Street, the Atlantic Ocean west to the Venetian Islands, according to an analysis based on the Condo Vultures® Official Condo Buyers Guide To South Beach™.
Developers created 37 projects with nearly 5,600 units in the South Beach neighborhood during the condo boom that began in 2003.
Prior to the real estate boom, South Beach - a historical district with a large number of Art Deco, low-rise structures - had 110 condo projects with 10,800 units.
As of Dec. 31, 2011, South Beach has sold nearly 83 percent of the developer units created during the real estate boom for more than $3.2 billion, according to the report.
In the fourth quarter of 2011, buyers acquired nearly 20 units for $15.1 million in four different projects between October and December.
The Boulan South Beach project was the most active based on total transactions with seven developer sales for nearly $2.7 million, according to Miami-Dade County records.
The W South Beach condo-hotel generated the highest combined dollar amount for the quarter with nearly $6.6 million generated from five transactions, according to the report.
The Continuum On South Beach sold a pair of developer units for a combined $4 million while the Mondrian South Beach sold five units for nearly $1.9 million in the fourth quarter of 2011, according to the report.
On the bulk resale front, the Artecity complex - that went back to the lender of record in the the third quarter of 2011 - sold nearly 20 units for $9.1 million in the fourth quarter of 2011.
Buyers acquired two units for a combined $2 million at the Capri South Beach fronting Biscayne Bay.
There was also a transaction in the ultra-luxury Ocean House - formerly the South Of Fifth project near the southern tip of the barrier island - for $4.3 million in the fourth quarter of 2011, according to government records.
As of Jan. 24, 2012, there are nearly 265 South Beach condos - built during the boom ear that began in 2003 - on the resale market at a median asking price of more than $930 per square foot, according to an analysis by the licensed Florida real estate brokerage CVR Realty™.
In 2011, there were nearly 300 resales of boom-era units at a median price of more than $630 per square foot, according to the analysis based on Florida Realtors association data.
It is important to note there are various stages to a residential real estate transaction in South Florida.
A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.
As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled.
The CondoVultures.com new condo sales report is based on completed transactions where a deed is recorded and taxes paid as a result of the sale.
Condo Vultures® LLC is a real estate consultancy and marketing company based at 1005 Kane Concourse, Suite 205, Bal Harbour, Florida, 33154. You can reach Condo Vultures® LLC at 800-750-0517.
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