Investors Own 87% of South Florida Coastal Condos

MIAMI-In new research that puts hard numbers on the condo investment trend in South Florida, CondoVultures.com has revealed that only 13% of the more than 43,200 South Florida coastal condo units created and sold since the real estate boom began in 2003 are owned by primary users who filed for Homestead Exemption.

That number could rise, considering investors are the most likely to continue the South Florida new condo buying trend until the remaining 5,400 coastal units are sold. The study is based on a review of every folio property identification number within the 987 projects with nearly 125,000 units on the coastal markets of South Florida.

“Freddie and Fannie typically require 51% primary users in order to provide financing for a building,” Peter Zalewski, a principal with the Bal Harbour, FL-based real estate consultancy Condo Vultures, tells GlobeSt.com. “Based on what we’ve seen, just about 175 buildings out of the 937 we looked at would theoretically quality for financing.”

Of the 76,100 units created through the year 2002, nearly 27,100 units—some 36%—have obtained Homestead Exemptions from their respective counties, according to the report. Overall, South Florida’s seven largest coastal condo markets have a Homestead Exemption rate of 27%.  Zalewski says it’s quite possible that renters are now occupying a majority of the coastal condos built during the South Florida real estate boom.

“This report just sort of reinforces the fact that second buyers and investors of this market,” Zalewski says. “Local buyers are buying at the pace of about one in every 10 condo transactions for new buildings. Foreign investors with strong currencies and domestic second-home buyers are clearly the lifeblood of the South Florida coastal condo market right now from Greater Downtown Miami north to Downtown Fort Lauderdale up to Downtown West Palm Beach.”