Categories





The Phaserl








TheLibertyMill


Official Numbers Hide Sagging Prices in Miami’s Epic Condo Glut

by Wolf Richter, Wolf Street:

Granular data shoes why numbers on the surface don’t add up.

Condo sales in Miami-Dade County have plunged. Condos on the market have surged. Supply has hit 14 months. Developers are sitting on completed units they can’t sell, and months’ supply in their projects has reached several years.

With this kind of supply-and-demand imbalance – sales down 25% from February 2014, inventory up 90% since early 2013 – you’d expect prices to head south. But the median price of condos in February, according to the Miami Association of Realtors, increased 6.3% year-over-year. This is the mystery we’ll shed some light on (chart by StatFunding):

StatFunding conducted an analysis of sales price per square foot in four condo projects with 2,634 units in Brickell, an area of Miami that is part of the “condo corridor.” These projects – 1050 & 1060 Brickell, Axis Brickell, Plaza Brickell, and Jade Brickell – are representative of the overall condo market. Turns out, per-square-foot prices in those four projects peaked in 2014 and 2015 and have since dropped between 10% and 16%.

So what’s going on?

One of the projects was completed in 2004, the other three in 2008. Hence there is a sales history. They’re “newer” and well-maintained projects in the aspiring-luxury and luxury categories of the market. Each project was built by a different developer (pricing data as of March 2017, based on the Multiple Listing Service (MLS) and the Miami-Dade Recorder).

The three projects completed in 2008 got caught up in the foreclosure crisis when these units were liquidated at prices as low as $200 a square foot. Whoever bought them at this price more than doubled their money by 2014! But that party has now ended.

1050 & 1060 Brickell (2008), “aspiring-luxury” category; two towers, none on the waterfront; 576 units, with studio, 1-bedroom, 2-story 1-bedroom loft, 2-bedroom, and 3-bedroom penthouse units; 55 units (9% of total) for sale on the MLS, or 26 months’ supply (25 units sold in 12 months). Average price per square foot (blue line) has dropped 16% since the peak in 2014.

In this particular project, studios, lofts, and units below the 14th floor were excluded. Here’s why:

The layout of the building is peculiar: The parking pedestal is shared by both towers, and the amenities and the pool deck are on the 12th floor. The units below the 12th floor are squeezed in leftover spaces of the project, and are almost all 1-bedroom 2-story lofts. Given their proximity to parking, they have a street-level feel, and according to Andrew Stearns, CEO of StatFunding, “the pricing on the units is all over the place and not representative of the project as a whole.”

Studios were excluded because the 1050/1060 is the only project of the four with studios, and there is no comparable data from the other projects.

Penthouses were excluded for all four projects since are all unique and sales don’t occur with enough frequency.

Read More @ WolfStreet.com

Help us spread the ANTIDOTE to corporate propaganda.

Please follow SGT Report on Twitter & help share the message.

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>