Below is a market update that I emailed to Marina Blue condo owners late last week. While not everyone reading this will have an interest in Marina Blue, I think a similar upswing in prices and lack of inventory as described below holds true for most major condo developments throughout Greater Downtown Miami.
If you haven’t heard, the real estate market in Miami is once again heating up and prices for condos at Marina Blue are following suit. Demand is high and inventory is low, paving the way for a strong 2013. Just how strong you might ask? I decided to crunch some numbers to help answer that question.
The left-hand side of the chart below graphically illustrates various statistics regarding asking prices in 2011 (blue), 2012 (red) and 2013 (green). There haven’t been any closed sales thus far this year so the right-hand side of the chart illustrates only sales that took place in 2011 (blue) and 2012 (red). It should be noted, however, that currently there are 4 pending sales at Marina Blue.
In 2011, there were a total of 33 closed transactions which sold at an average price of $324,806, or $299 per square foot. In 2012, the number of closed sales increased 73% to 57 and sold at an average price of $378,495, or $329 per square foot. Due to outlying sales that skew the averages, the median sales price can sometimes provide a better sense for the overall market but that is not the case with this data set. The average and median figures for each year are relatively in line with each other. The average sales price increased 16.5% from 2011 to 2012 while the average price per square foot increased only 10%. This indicates that a greater percentage of larger units sold in 2012 than in 2011.
That brings us to the present day. As of January 14, 2013, there were 29 condos available for sale at Marina Blue. These units ranged in price from $355,000 to $2.8M. The average list price is skewed dramatically, however, due to one listing that is way off base. In this case, the median list price of $515,000 provides better insight into the overall market than the average list price of $698,793.
The chart below follows the same format as the chart above but breaks everything down on a price per square foot basis.
When comparing current availability with closed sales in 2012, it should be immediately clear that current asking prices are very high relative to where condos have sold in 2012. The median sales price per square foot in 2012 was $326 while the median asking price per square foot is currently $452. That is a huge gap but presents a big opportunity for someone who is looking to sell fairly quickly at an above average market price. To be clear, I feel that the average unit will now get $370-$380 per square foot. That is a very healthy premium when comparing it to the median sales price per square foot in 2012. Obviously, units on high floors with above average build-outs should fetch even more.
As inventory dwindles, I have noticed that more and more condo owners throughout Miami are starting to raise their asking prices. For example, of the 62 units currently available for sale at 900 Biscayne Bay, 13 of the owners have decided to increase their offering price since initially hitting the market. At Ten Museum Park, 6 of the available 22 units are now offered at a higher price than was available just months ago. A similar trend can be seen at plenty of other major condo developments throughout Miami as well. Sellers are taking advantage of the low inventory and are adjusting their offering prices accordingly.
One Thousand Museum’s Likely Impact on the Neighborhood
Last month, it was announced that world-renowned architect Zaha Hadid has been appointed to design a luxury skyscraper in a neighborhood of Downtown Miami know as Park West. The residential high-rise, known as One Thousand Museum, will be developed by Gregg Covin, the developer behind Ten Museum Park, and Louis Birdman. The planned project will be erected in what is the current location of a BP gas station which neighbors Ten Museum Park at the intersection of Biscayne Boulevard and Northeast 10 Street. Sales information is expected to be released during the first half of 2013.
There always seems to be a sense of excitement surrounding the announcement of a new development in Miami and the news of 1000 Biscayne Tower was no different. Not everyone, however, shares the same sentiment. Residents in the immediate area are not always thrilled about the inevitable noise, traffic congestion and their views potentially becoming obstructed due to the new construction. Taken yesterday evening, the picture above shows not only the site of the BP gas station but also its neighboring condo developments – 900 Biscayne Bay to the south and Ten Museum Park to the north. Due to their proximity, it should be clearly discernible that views in each high-rise from units closest to 1000 Biscayne Tower will be significantly affected. To be exact, there are three lines in each development which will have their views hindered: the 08, 10 and 12 lines at 900 Biscayne Bay and the 01, 07 and 08 lines at Ten Museum Park. The following site plans illustrate where these lines reside on each building.
Below is my assessment on how the view of each of these lines will be affected:
08 line – Earlier this morning, I showed an 08 line at 900 Biscayne Bay and made sure to make a mental note of what the view looked like from the living room. In this floor plan, the master bedroom is to the left of the living room and the second bedroom is to the right, with all three rooms facing in the same direction. Of the three lines at 900 Biscayne Bay that will be affected by the erection of 1100 Biscayne Tower, the 08 line will be affected the least. Notice the setback that Ten Museum Park has from the sidewalk. 1000 Biscayne Tower will have a similar setback and, therefore, the water view from the 08 line will, for the most part, not be obstructed. Having a massive building directly in your line of view is definitely less than optimal but at least these residents won’t have their water view compromised.
12 line – At first glance, it might appear that the 12 line will have their views most adversely affected due to it being the furthest line away from the street but that’s not the case. There’s no doubt that its water view will be most compromised of the three lines but one must remember that this uniquely situated floor plan also has views to the south and west. The west view at night is stunning and the development of 1000 Biscayne Tower will in no way take anything away from that. These residents will still be able to enjoy a view of the sunset from within their unit and should still be able to enjoy a view of the sunrise from their balcony.
10 line – In my opinion, residents who live in a 10 line at 900 Biscayne Bay have the most to lose in regards to their view being obstructed if a high-rise is indeed constructed on the current site of the BP gas station. The 10 line is boxed in on either side by the 08 and 12 lines and will look directly into the southern end of 1000 Biscayne Tower. Their water view will likely go from unimpressive to highly obstructed in a jiffy. Any semblance of a view that might remain will be further compromised by the almost certain development of the Miami Herald site in the future.
The impact such a development will have on the views of the units located on the southern end of Ten Museum Park is much easier to assess. The footprint of the building is perfectly symmetrical and, therefore, the units located on the northern end which look into Marquis Residences serve as a perfect example for what views will look like from the 01, 07 and 08 lines in the future if a development is constructed at the site in question.
01 line – This line offers a direct water view and the water view will in no way be affected by the development of 1000 Biscayne Tower. Privacy from the living room might be a concern but it’s nothing that solar shades or long curtains can’t fix. Besides, privacy at this end of the building hasn’t been expected since 900 Biscayne Bay began closings in 2008. Take a tour of an 04 line to get a sense for what it will feel like to have a building so close.
07 line – Like the 12 line at 900 Biscayne Bay, this line offers a view to the south and west. Its southern view will be compromised but its view to the west will be unaffected. Your view of the water will be slight at best. Take a tour of an 06 line to see what I mean.
08 line – The view from the 08 line will be obstructed the most by the development of 1000 Biscayne Tower. Residents will look right smack into the northern end of the planned high-rise. The 05 line will give you an uncanny feel for what life will be like having a view of the side of a building.
Within the past five years, Park West, the neighborhood name given to the area immediately west of the upcoming Museum Park, has undergone a transformation that has been nothing short of amazing. One could argue that the addition of 1000 Biscayne Tower, as well as the oft-mentioned 700 Biscayne Bay which will be located just south of Marina Blue, is just another step in the progression of Downtown Miami. Such additions should no doubt strengthen Park West’s positioning as one of Miami’s most luxurious neighborhoods. I wrote about this inevitable progression in a blog post back in July 2007. In it, I referred to the neighborhood’s development as Miami’s equivalent to Manhattan’s Park Avenue. There’s no question that Park West has not yet arrived at its potential but there is little doubt that it is well on its way. While short term demand for condos in the lines mentioned above will likely wane due to having to deal with construction noise outside your window as well as the loss of views and privacy, it is difficult to jump ship from a neighborhood that is heading in the right direction with lots of upside potential. Across the street, the $220M Miami Art Museum at Museum Park is scheduled to open later this year with the Miami Science Museum following about a year later. Additionally, there has been a lot of talk as of late regarding Miami Worldcenter indicating that the mega-development may not be a pipe dream after all. If Miami Worldcenter is formerly announced and becomes an actuality then, mark my words, Park West will become the most highly sought after neighborhood in Miami. You can take that to the bank!
Ten Museum Park Developer Settles Class-action Lawsuit with Condo Association for $587,500
According to Daily Business Review, Ten Museum Park developer Gregg Covin has agreed to settle a class-action lawsuit, filed in 2010, with the building’s condo association. Disgruntled owners argued that certain amenities were not delivered as promised in the 2005 marketing brochures. The developer has agreed to pay the condo association $587,500 which will be used to update the common areas.
The Lebron Effect on Downtown Miami Real Estate Prices
It has been a long and winding road but the Miami Heat accomplished Thursday night what they had set out to do in July 2010 – to win an NBA championship. The Miami Heat defeated the Oklahoma City Thunder 4-1 in the NBA Finals to become the 2012 NBA champions. In all honestly, the Miami Heat obliterated the OKC Thunder and made a mockery of them – but we won’t go there. Few would refute that LeBron James, the Most Valuable Player of the 2011-2012 season, was the most contributing factor which allowed the Miami Heat to raise the NBA trophy Thursday night for only the second time in franchise history. LeBron James’ decision in July 2010 to take his talents to South Beach single-handedly changed the landscape of the league and set forth in motion an inevitability that no one outside of Miami wanted to see.
James’ arrival in the summer of 2010 was celebrated not only by die-hard Heat fans but also anyone with any type of business or property interest in the city. His announcement was seen as a godsend to the hotel and tourism, restaurant and real estate industries throughout Miami. The area most positively impacted by LeBron James’ decision to join the Heat was most certainly Downtown Miami, the neighborhood immediately surrounding the Miami Heat arena. Prior to James’ arrival, property values in Downtown Miami had endured several years of double digit price declines. Furthermore, retail spaces and hundreds of condominiums within walking distance of the arena sat completely empty. However, that was all about to change.
Within days of James’ announcement, there were reports of buyers snatching up condos in the area in a flurry of excitement. As a result, developer inventory began to dwindle and Miami real estate prices started to recover over the subsequent months. Since LeBron James’ decision in 2010, real estate values in Downtown Miami have increased over 20 percent. Additionally, across the street from the arena, several new businesses – such as a pizza restaurant, wine bar, Chinese restaurant and sports bar – have opened their doors. One could argue that James’ arrival played an instrumental role in the real estate recovery seen in Downtown Miami in recent years.
Downtown Miami Rental Market
Below, is a spreadsheet I compiled earlier this afternoon that shows various statistics regarding the Downtown Miami condos rental market. Click on the link below the spreadsheet to view it in its entirety. I calculated the months of inventory figure by dividing total units available by the average units rented over a three month period from December 1, 2010 to February 28, 2011. You will see that Downtown Miami currently has 2.55 months of rental inventory.
Downtown Miami Rental Market as of March 15, 2011
Ten Museum Park 3 Bedroom Penthouse Reduced to $850K
A 3 bedroom/3.5 bath penthouse at Ten Museum Park was reduced last month to $850,000, or $347 per square foot. The bi-level penthouse has 2,581 square feet of interior, 519 square feet of exterior, hard wood flooring throughout and floor-to-ceiling windows facing southwest from the 44th floor. The penthouse also comes with a rooftop pool which is a nice selling point of the penthouses at Ten Museum Park. The original list price was $1.19M.
We’re putting the finishing touches on our Ten Museum Park website. It should be finished by the end of the week. Check there for available sales and rentals at Ten Museum Park.
Top 5 Distressed Condo Sales Closed in January 2010
Below, you will find what I believe to be the five best condo deals of the 66 distressed sales that closed in January 2010 in the MLS located in Brickell, Brickell Key, Downtown Miami and the Arts District.
Ten Museum Park #1905 – 1 bedroom/1.5 bath (791 square feet) – This unit sold for $137,000, or $173 per square foot, on January 11, 2010. Short Sale
Neo Vertika #PH226 – 1 bedroom/2 bath (1,155 square feet) – This unit sold for $158,000, or $137 per square foot, on January 11, 2010. Foreclosure
Parc Lofts #206 – 2 bedroom/1 bath (1,267 square feet) – This unit sold for $122,000, or $96 per square foot, on January 8, 2010. Foreclosure
The Club at Brickell Bay #1506 – 1 bedroom/1 bath (825 square feet) – This unit sold for $108,000, or $131 per square foot, on January 15, 2010. Foreclosure
Solaris at Brickell #806 – 1 bedroom/1 bath (754 square feet) – This unit sold for $120,000 or $159 per square foot, on January 29, 2010. Foreclosure
The Arts District & Downtown Miami Closed Condo Sales – November 2009
Edgewater Miami Closed Condo Sales – November 2009 – There were 12 closed condo sales in the Edgewater Miami last month in the MLS. The average sales price of these condos was $177 per square foot.
Downtown Miami Closed Condo Sales – November 2009 – 18 condos in Downtown Miami closed in the MLS in November 2009. These sold at an average sales price per square foot of $318. It’s interesting to note that of the four neighborhoods in Miami, the condos in Downtown Miami sold at the highest price per square foot last month.
Ten Museum Park Penthouse Sells for $250 Per Square Foot
A 5 bedroom + den/6.5 bath, three-story penthouse sold for $250 per square foot at Ten Museum Park on November 6, 2009. The penthouse, with 20-foot ceilings, has 5,394 square feet of interior, 1,779 square feet of terrace and a private dipping pool on the roof. Prices have come down considerably at Ten Museum Park within the past 18 months. About a year and a half ago, a 3 bedroom/4.5 bath penthouse at Ten Museum Park sold for $622 per square foot. Although it was one of the first to be completed during this past condo boom, unsold developer inventory at Ten Museum Park still remains. I recently received an email stating the developer was looking to let all remaining lofts go for $300 per square foot. It’s going to be difficult to justify that amount when a penthouse just sold for $250 per square foot.
Drive Down Brickell Avenue and Biscayne Boulevard – Video
I must say that I’m very impressed with how far video technology has come along over the past year. Gone are the days of YouTube’s grainy video quality. YouTube now allows people to upload and view HD videos. Don’t expect the HD quality that you see on your HD TV but it’s still a big leap for Internet video.
Here are a couple of videos that I shot Friday night while driving down Brickell Avenue and Biscayne Boulevard. (It may take a while to load if you’re using a slow Internet connection). You’ll notice Icon Brickell, Epic and One Miami in the video below:
