New Construction of Condos in South Florida
2012 Real Estate Market Report
As a result of significantly increased sales and an almost complete sell-out of Condos that were built during the Boom, Inventory of new and resale Condos in South Florida has decreased to the point that Developers have proposed Construction of 26 new Condo Towers in South Florida’s Tri-County areas of Broward, Miami-Dade, and Palm Beach. Included in areas where Condos were built during the Boom are downtown Miami, South Beach, Sunny Isles Beach, Hollywood, Hallandale Beach, Ft. Lauderdale, Boca Raton, Deerfield Beach, West Palm Beach, and Palm Beach.
It’s not the old Market anymore. Interested Buyers who are new to the Market and inquiring about “empty Buildings, all the distressed Condos, 50% off of current Market value, and Foreclosures of new Waterfront Condos” are several years behind with Market statistics and are thinking that it’s the 2007 – 2008 Market when South Florida had the highest level of inventory and lowest number of sales. Fortunately, the Market has improved significantly since then. In many cases, today’s Condo prices are approximately 50% less than their previous values in the old Market, however, the decrease in current Inventory and increase in sales has been accompanied by increases in current values, so prices are not remaining depressed in the most desirable areas that have the highest levels of demand.
So, what’s going on with the “Shadow Inventory” that you keep hearing about? “Shadow Inventory” = Foreclosures that Banks haven’t yet released into the Market. Searches of County Foreclosure Records indicate that although there are Foreclosures that haven’t been released into the Market yet, such properties are not the majority of existing Units in East and Waterfront Condos. Additionally, some Foreclosures never reach the open Market because they are purchased directly through the Court’s Auction process. Furthermore, even when Foreclosures are listed on the open Market/for sale through Brokers selected by Banks, the majority of such properties in highly desirable locations are typically purchased within 30 days or less and are very often purchased for prices that exceed their list prices because of multiple offers. As such, Shadow Inventory is not considered to pose a threat to the health of the East Condo Market.
Many of South Florida’s Condo Buyers are Foreigners (whom are estimated to account for approximately 80% of current Condo sales and pre-sales), but Domestic Buyers who live outside of Florida are also very active in the Market of Buyers who purchase vacation properties (2nd, 3rd, and 4th Homes) and/or Investment properties. Of the 50 States in the U.S., Florida is fortunate to sell the highest number of properties to International and Domestic Buyers who purchase vacation and/or investment properties (the majority of whom purchase properties that are located in East areas close to the Beach) so we benefit significantly from the fact that we’re not limited to local demand and, therefore, don’t have a Real Estate Market that’s impacted as greatly by unemployment levels as some other Markets are in the U.S. South Florida’s Real Estate Market is Global/International.
Besides Warm Weather, lower Property Taxes than New York, California, and a number of other States plus close proximity to several International locations and convenient Airline access, South Florida’s prices remain a bargain in comparison to locations where many of our Buyers come from. Here are a few examples of average prices per Square Foot for new downtown Condos in various areas:
- Downtown Miami: $400
- South Beach area of Miami Beach: $1,000
- Ft. Lauderdale: $300
- Manhattan, New York: $1,295
- Bogota, Colombia: $700
- Sao Paulo, Brazil: $1,100
- Rio de Janeiro, Brazil: $1,100
- Toronto, Canada: $750
Of the new Condos currently in development in South Florida, several are already under construction and are scheduled for completion in 2012 and 2013 (see list below):
- 23 Biscayne Condo in Miami, FL: Scheduled for Construction completion in July of 2012 and completely sold out in November of 2011. 23 Biscayne will have 96 Units and is Bayfront in the downtown/Brickell area of Miami.
- 4001 North Ocean Condo in Gulfstream, FL: Scheduled for Construction completion in December of 2012 and is 58% sold. 4001 North Ocean Condo will have 34 Units and is a direct Oceanfront Building on the Beach. 4001 North Ocean isn’t a “Tower” per se, but it’s a Luxury Condo that’s worthy of inclusion. Price range for the remaining Units: $1.8 – $5.1 Million.
- Apogee Beach Condo in Hollywood, FL: Scheduled for Construction completion in the Fall of 2013 and is 90% sold (per the Developer, the presales were to 87% Argentines, Venezuelans, and Mexicans and only 5 percent to Americans). Apogee Beach will have 49 Units and is a direct Oceanfront Building on the Beach. Price range for the remaining Units: $1,874,900 – $2,014,900.
- My Brickell Condo in Miami, FL: Scheduled for Construction completion in September of 2013 and is 95% sold. My Brickell will have 192 Units and is a non-Waterfront Building in the downtown/Brickell area of Miami. Price range for the remaining Units: $256,900 – $444,900.
- Bellini Williams Island Condo in Aventura, FL: Scheduled for Construction completion in the Summer of 2013. Bellini at Williams Island is Waterfront and will have 70 Units. Price range: $1,125,000 – $4,250,000.
- Regalia Condo in Sunny Isles Beach, FL: Scheduled for Construction completion in the Fall of 2013. Regalia is a direct Oceanfront Building on the Beach and will have 39 Units, with only 1 Unit per Floor. Price range: $4.7 – $20,000,000.
In reference to pre-construction Condos or Condos that are currently under Construction, the term “sold” refers to the fact that Condo Developers have Contracts/accepted Offers and Deposits from Buyers who plan to purchase Units when construction is complete (these are also known as pre-sales).
Because there are challenges in the current Market with Developers obtaining Construction Loans, Developers of the majority of new Condos are requiring Buyers to commit to Deposits to be paid in phases*. In the previous Market, Buyers were typically required to pay a 20% deposit to reserve Units and then pay the remaining amount when Construction was complete and, in that Market, many Buyers Financed their purchases. The vast majority of new Construction Condo purchases are Cash and, in the current South Florida Market, approximately 80% of Condo purchases are Cash, for both new and resale Units.
*-Below is an example of a Deposit schedule to be paid in phases (there are variations, but this provides an idea of the basic structure):
- 20% paid upon execution of Contract
- 20% paid the later of (1) 90 days after execution of contract and (2) completion of Foundations
- 20% paid at completion of pouring top Floor (i.e. building Top off)
- Balance paid at closing
If you would like additional information about these properties or others, feel free to call or email me.
…
New Construction of Condos in South Florida
2012 Real Estate Market Report
As a result of significantly increased sales and an almost complete sell-out of Condos that were built during the Boom, Inventory of new and resale Condos in South Florida has decreased to the point that Developers have proposed Construction of 26 new Condo Towers in South Florida’s Tri-County areas of Broward, Miami-Dade, and Palm Beach. Included in areas where Condos were built during the Boom are downtown Miami, South Beach, Sunny Isles Beach, Hollywood, Hallandale Beach, Ft. Lauderdale, Boca Raton, Deerfield Beach, West Palm Beach, and Palm Beach.
It’s not the old Market anymore. Interested Buyers who are new to the Market and inquiring about “empty Buildings, all the distressed Condos, 50% off of current Market value, and Foreclosures of new Waterfront Condos” are several years behind with Market statistics and are thinking that it’s the 2007 – 2008 Market when South Florida had the highest level of inventory and lowest number of sales. Fortunately, the Market has improved significantly since then. In many cases, today’s Condo prices are approximately 50% less than their previous values in the old Market, however, the decrease in current Inventory and increase in sales has been accompanied by increases in current values, so prices are not remaining depressed in the most desirable areas that have the highest levels of demand.
So, what’s going on with the “Shadow Inventory” that you keep hearing about? “Shadow Inventory” = Foreclosures that Banks haven’t yet released into the Market. Searches of County Foreclosure Records indicate that although there are Foreclosures that haven’t been released into the Market yet, such properties are not the majority of existing Units in East and Waterfront Condos. Additionally, some Foreclosures never reach the open Market because they are purchased directly through the Court’s Auction process. Furthermore, even when Foreclosures are listed on the open Market/for sale through Brokers selected by Banks, the majority of such properties in highly desirable locations are typically purchased within 30 days or less and are very often purchased for prices that exceed their list prices because of multiple offers. As such, Shadow Inventory is not considered to pose a threat to the health of the East Condo Market.
Many of South Florida’s Condo Buyers are Foreigners (whom are estimated to account for approximately 80% of current Condo sales and pre-sales), but Domestic Buyers who live outside of Florida are also very active in the Market of Buyers who purchase vacation properties (2nd, 3rd, and 4th Homes) and/or Investment properties. Of the 50 States in the U.S., Florida is fortunate to sell the highest number of properties to International and Domestic Buyers who purchase vacation and/or investment properties (the majority of whom purchase properties that are located in East areas close to the Beach) so we benefit significantly from the fact that we’re not limited to local demand and, therefore, don’t have a Real Estate Market that’s impacted as greatly by unemployment levels as some other Markets are in the U.S. South Florida’s Real Estate Market is Global/International.
Besides Warm Weather, lower Property Taxes than New York, California, and a number of other States plus close proximity to several International locations and convenient Airline access, South Florida’s prices remain a bargain in comparison to locations where many of our Buyers come from. Here are a few examples of average prices per Square Foot for new downtown Condos in various areas:
- Downtown Miami: $400
- South Beach area of Miami Beach: $1,000
- Ft. Lauderdale: $300
- Manhattan, New York: $1,295
- Bogota, Colombia: $700
- Sao Paulo, Brazil: $1,100
- Rio de Janeiro, Brazil: $1,100
- Toronto, Canada: $750
Of the new Condos currently in development in South Florida, several are already under construction and are scheduled for completion in 2012 and 2013 (see list below):
- 23 Biscayne Condo in Miami, FL: Scheduled for Construction completion in July of 2012 and completely sold out in November of 2011. 23 Biscayne will have 96 Units and is Bayfront in the downtown/Brickell area of Miami.
- 4001 North Ocean Condo in Gulfstream, FL: Scheduled for Construction completion in December of 2012 and is 58% sold. 4001 North Ocean Condo will have 34 Units and is a direct Oceanfront Building on the Beach. 4001 North Ocean isn’t a “Tower” per se, but it’s a Luxury Condo that’s worthy of inclusion. Price range for the remaining Units: $1.8 – $5.1 Million.
- Apogee Beach Condo in Hollywood, FL: Scheduled for Construction completion in the Fall of 2013 and is 90% sold (per the Developer, the presales were to 87% Argentines, Venezuelans, and Mexicans and only 5 percent to Americans). Apogee Beach will have 49 Units and is a direct Oceanfront Building on the Beach. Price range for the remaining Units: $1,874,900 – $2,014,900.
- My Brickell Condo in Miami, FL: Scheduled for Construction completion in September of 2013 and is 95% sold. My Brickell will have 192 Units and is a non-Waterfront Building in the downtown/Brickell area of Miami. Price range for the remaining Units: $256,900 – $444,900.
- Bellini Williams Island Condo in Aventura, FL: Scheduled for Construction completion in the Summer of 2013. Bellini at Williams Island is Waterfront and will have 70 Units. Price range: $1,125,000 – $4,250,000.
- Regalia Condo in Sunny Isles Beach, FL: Scheduled for Construction completion in the Fall of 2013. Regalia is a direct Oceanfront Building on the Beach and will have 39 Units, with only 1 Unit per Floor. Price range: $4.7 – $20,000,000.
In reference to pre-construction Condos or Condos that are currently under Construction, the term “sold” refers to the fact that Condo Developers have Contracts/accepted Offers and Deposits from Buyers who plan to purchase Units when construction is complete (these are also known as pre-sales).
Because there are challenges in the current Market with Developers obtaining Construction Loans, Developers of the majority of new Condos are requiring Buyers to commit to Deposits to be paid in phases*. In the previous Market, Buyers were typically required to pay a 20% deposit to reserve Units and then pay the remaining amount when Construction was complete and, in that Market, many Buyers Financed their purchases. The vast majority of new Construction Condo purchases are Cash and, in the current South Florida Market, approximately 80% of Condo purchases are Cash, for both new and resale Units.
*-Below is an example of a Deposit schedule to be paid in phases (there are variations, but this provides an idea of the basic structure):
- 20% paid upon execution of Contract
- 20% paid the later of (1) 90 days after execution of contract and (2) completion of Foundations
- 20% paid at completion of pouring top Floor (i.e. building Top off)
- Balance paid at closing
If you would like additional information about these properties or others, feel free to call or email me.
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