Miami & Miami Beach Condo Supply Down Sharply
September 1, 2011 by Lucas Lechuga
The figures below were compiled on August 31, 2011. Three sets of spreadsheets and graphs can be found below. The first pertains to the inventory and sales figures for condos throughout Miami-Dade County. The second focuses on those located only in Miami while the third set concentrates on condos residing only in Miami Beach.
I grouped the number of available condos into seven distinct price ranges and provided total closed sales figures over the past six months for each. Columns three, four and five display figures for average closed sales per month, months of supply and years of supply, respectively. The last three columns show the percentage change in those figures when compared to those published slightly over 16 months earlier in April 2010.
As you will see, there is currently a little over 6 months worth of condos for sale throughout Miami-Dade County. Obviously, the supply figures vary within each price range and again when looking at the figures specific to Miami and Miami Beach. It is important to note that the figures below only include resales listed on the MLS. Developer inventory and closed sales are not included. My guess is that the statistics would be even more compelling had those figures been included. To put things into perspective, I recently heard that Icon Brickell had been averaging around 60 closed sales per month. With 1,796 total units, Icon Brickell had been the poster child of the oversupply problem in Miami. Icon Brickell currently has less than 100 available condos for sale. Word on the street is that sales for condos at Paramount Bay will launch later this month. Once it does, Paramount Bay will be the last of the recently constructed condo developments to hit the market and will add just 350 total units. Many of those condos have already been secured by original contract holders and interest from potential buyers for the remaining units is staggering. A shortage of condos in Miami is an almost certain problem that lurks on the horizon. Keep in mind, even if new condo developments were planned and approved tomorrow, it would be another 3-5 years for those condos to be completed and delivered.
Below, you will find the Miami-Dade County condo supply and sales figures for August 2011:
The following statistics encompass only those condos located throughout Miami (not other areas of Dade County such as Miami Beach, Aventura, Sunny Isles Beach, etc.):
The following statistics encompass only those condos located throughout Miami Beach:
developer inventory
“A shortage of condos in Miami is an almost certain problem that lurks on the horizon.”
— Well, maybe. A more accurate way of putting it is: “A shortage of rental units exists in Miami for the locals who can’t afford to buy the condos.” That’s the real story here, whether people wan to admit it or not.
From DQ News:
“Foreign buyers purchased about 5.5 percent of all homes sold in the Miami region last month, based on a review of public property records where foreign addresses were available. Of the foreign buyers that could be identified, about 73 percent had mailing addresses in Canada. The next-most-common country was Brazil, representing 3.5 percent of the buyers with a foreign address available in the public record, followed by Venezuela and Argentina, which both represented 2.6 percent. Some foreign buyers use a U.S. mailing address and therefore cannot be identified with public records.”
As a whole foreign buyers are a small protion of the market. The issue is that almost all of the foreign money is going into the same areas. So while foreign money might be only 8% of the entire market it may be 60% of Brickell.
So downtown areas are simply now joining the ranks of South Beach in that their product is now priced on an internation basis instead of a local one.
Your argument is like saying that price of diamonds should reflect what the local people in South Africa mining them can afford.
Unless you think the foreign appetite for these units is going to go dry up sometime soon why would you even care whether some guy that grew up in Hialeah can afford a downtown condo?
A shortage is a shortage regarless of who the customer is. Are you concerend about the well being of local Miamians or the price of a condo?
To your point Joe. I think there is more to the story as I believe there are also many who can afford to buy who now still choose to rent as well. This dynamic is also attracting buyers/investors which is helping the market as well. One thing the buyers & sellers share in many cases is a belief that the prices, though more stable ,aren’t climbing significantly anytime soon, something which I thinks also lends stability to the market.
Great stuff. Good research. I have this unanswered question. The folks who moved to Downtown luxury condos and enjoyed the fabulous life for cheap in the past 3 years, will they now move back to the far away suburbs since rents are becoming unaffordable or will they cut back on $15 martinis and continue to stay?
At first people moved to Brickell (and Midtown) for cheap rent in newer buildings. However as all those people have moved in and restaurants, retail, etc. have sprouted up to support them its now the area that is popular and not the cheap rents. You can see it in the pure rental buildings where they have carpet, while appliances, laminate countertops, etc. and there still getting good rents because of their location.
There is already plans in the works for low cost alternatives in the west Brickell area to allow people at lower price points to remain in the area.
Gixxer, good insight
Gixxer’s just shilling as always. Barely six months ago, everyone was in agreement that the foreign buyers saved the So. Fla. housing market, and now, all of a sudden, despite a worsening economy, foreign buyers are only a “small percentage.” Same garbage, new years.
As for Gixxer’s comparison to diamonds, that’s so dumb I hardly know where to start. People don’t buy diamonds and then rent them out to people who can’t afford them. The renter vs. owner-occupied ratio in Miami is bad and getting worse. Pretending that’s a positive is idiotic.
I don’t recall anyone talking about how foreigners were buying real estate in Homestead. The foreign money has always been focused in a few core areas and downtown has always been one of them.
You can keep calling it garbage but regardless prices still continue you to go UP.
You’re argument against renters is you’re only way to save face. “Prices are going up but there are more renters.”
Who cares. It’s the rising rents that are sending the values higher. Just a couple years ago you could rent a one bedroom for about $1300. Now that same one bedroom rents for about $1700. Were talking about people that are putting down 3 months of rent up front, that’s almost $6000. You don’t see any of the articles like you once did about problems with renters.
Miami has one of the strongest rental markets in the nation with some of the lowest vacancy rates. THIS IS A GOOD THING. Its whats driving new development.
Do you even know the percentage of renters to owners? Do you know the percentage of renters to owners in a city that you think is a good percentage?
NO, you just say the percentage here is bad. No numbers, no facts, just pure BS to suit what you want to believe.
Gixxer’s breathless rebuttals are comical for reasons he apparently still doesn’t understand. He’s like the comedy gift that keeps on giving.
The Miami economy is bad. The growing gap between rich and poor is bad. The issue of persistent unemployment is bad. Pretending the growing gap in Miami between owners and renters is good is the same head-in-the-sand stupidity that brought us the r.e. crash just 3-4 years ago.
When a huge number of wealthy foreigners start moving to Miami and creating jobs, I’ll get excited. Otherwise, foreigners dumping money in Miami to buy condos they immediately rent to (poorer) locals is not a positive and it’s nothing to celebrate. It’s like telling a factory worker who gets laid off when his factory job moves to China: Hey, sorry you lost your job, but at least your sneakers will be 5 percent cheaper!
I’m not necessarily arguing with you about the Miami economy. Or the U.S. economy for that matter. But I thought we were discussing the value of Miami condos not the state of the economy.
As bad as the economy is I got a job here making good money, as did many of the people I knew in school.
Again you provide no numbers or facts just what you think. While there are negatives and positives to the situation the suburbs seem to be getting most of the negatives while the urban areas are getting the positives. Until it gets to the point where the negatives of the suburbs begin to affect the urban areas I could care less.
You can keep arguing about factory jobs in china but again what does this mean for Miami condos?????
“Again you provide no numbers or facts just what you think.”
— Seriously, are you nuts? You really need me to post the numbers on Miami’s economy, unemployment, etc.?
“Miami-Dade saw a broader recovery in August compared to the prior year. Using raw numbers, the county gained 13,900 jobs during the last 12 months. Health care posted the most gains (5,900), followed by retail (4,700) and 3,400 jobs in professional services, the category that includes lawyers and accountants as well as low-paid temporary workers.”
“Restaurants, where payrolls have been expanding since fall 2009, continued their hiring streak, adding 4,100 jobs in August.”
“I can’t fill all the positions in front of me,” said Bob Kane, president of the Le Cordon Bleu culinary school in Miramar. After hitting a soft spot in 2009 and 2010, Kane said graduates now find it much easier to find jobs as restaurants and hotels beef up their staffs.
“We’re going to be sending our next graduating class out for interviews early,” he said, “because there is such a need.”
The area that is really lagging is construction. But we have huge projects like Citicentre, Resort World, Biscayne Landing, etc. all that could get started in the next few years.
“Otherwise, foreigners dumping money in Miami to buy condos they immediately rent to (poorer) locals is not a positive and it’s nothing to celebrate.”
Again more ridiculous comments. The units they are renting are averaging $1.80 a square foot. Were talking about people paying $2000 in rent. Do the math, were talking about people making $80k to be able to rent these places.
But all of which is beside the fact that prices are going UP. If they are doing that now with these economic conditions that you hate so much then what happens next year when the economy is that much better???
“The fact that home prices are rising despite distressed sales that account for the majority of sales is indicative of very positive trends in the Miami marketplace,” said Jack H. Levine, 2011 Chairman of the Board of the Miami Association of Realtors. “If prices are rising for countywide figures that include distressed properties, strengthening would be that much greater if distressed listings were eliminated or reduced. We believe the Miami market in terms of pricing has bottomed.”
Are you serious? A county with 3,000,000 people gained a lousy 13,900 jobs and you’re trumpeting that as a recovery? Really?
That new burger joint in Miami had something like 3,000 people apply for 60 jobs. But yeah, keep telling us about the worker shortage. Unbelievable.
I’m not talking about an economic recovery, I’m talking about real estate. I just wrote that I don’t necessarily disagree with you about the economy.
But this is a website about Miami CONDOS. And out of those 3,000,000 people there are enough that can rent the 22,000 condos from Latin American buyers at ever increasing rent prices that are therefore driving downtown condo prices higher.
I’m not arguing that unemployment is going to 4% anytime soon. But I think its pretty obvious that we bottomed in 2009 when you were still predicting doom and gloom and with projects like Citicenter and Resort World on the horizon its only getting better.
The recovery is not a one sided recovery. The lower class is still hurting while people like myself with the proper education are doing great. So while 3000 people might be fighting for 60 positions to flip burgers me and many of my friends with graduate degree ended up with multiple job offers.
And there are more of us at this point than there are condos. Believe me, I wish this wasn’t the case. If you recall when I moved here I was looking to get something in the $200k range. 2/2 in my building were going for $240k. Now those same 2/2 are going for $350K+.
None of you anecdotal evidence about 3000 people without high school degrees applying for burger jobs is going to change the fact that prices have already bottomed and are going higher.
Again you say how these condos are being rented to poor people but how can poor people afford $2200 a month rent?
Don’t believe the hype about the inventory!!! Does anyone have a clue about how many properties are sitting at banks in and REO status that have not been listed or offered for sale!!! It’s an enormous amount but the banks will not show a loss until those same properties are closed on…so what are they doing…sitting on them! How would you like to be head of the REO department at these banks and have to do the monthly figures on all the money that is lost once these properties are released…no one wants the job and the banks don’t want to take the hit. So while it looks like the inventory is down, don’t be fooled…there is plenty of inventory that no one is counting right now and until we can clear the market of those properties then we will keep getting false readings.