By the end of this September, the number of multifamily closings throughout South Florida was 46% above the number of transactions in all of 2003. One-third, 63%, of the transactions that took place between January and October came from condo-converters. In Miami-Dade, condo-converters represented 86% of all multifamily sales transactions this year. The current market is so attractive, "that many traditional rental-property investors are becoming condo-converters, and the prices have been pushed to a point where these investors are spreading their wings," Capas says. Year-to-date multifamily transaction volume in Miami-Dade alone nearly doubled in comparison with all of last year to exceed $1.4 billion versus a total of just under $714 million in 2003. Throughout all of South Florida, multifamily transaction volume so far this year totals almost $2.9 billion, compared with a total of $1.9 billion in 2003.

Unit prices are up 40% since last year. The average price-per-unit for a South Florida multifamily property is now $125,500, up from $89,700 a unit at the end of 2003. In 2001, the average price per unit was $74,500.

Another consequence of this super-charged market is that apartment owners are getting inundated with offers that are too good to refuse--so good that some owners don't expose their properties to the open market. "Many sellers are leaving money on the table," Capas says. "Flips" are also proliferating. In what Capas describes as a somewhat typical transaction, "a Northwest Miami property recently sold for $92,000 a unit, and, on closing, the buyer sold it for $99,000 a unit, reaping a $7,000-gain on each unit in the building."

This climate also gives owners "a rare opportunity to escape unfavorable mortgage provisions," Capas says. "Unprecedented demand has pushed the prices of many properties high enough to more than offset prepayments or costs associated with unraveling unfavorable debt. "At the moment, I don't see an end in sight," he adds. The only factor that could stall this rising tide, he suggests, would be an increase in interest rates significant enough to prevent first-time homebuyers from purchasing a condo and thus keeping them in the rental market.