South Florida Shifts to Seller’s Market on Condo Front

(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)

MIAMI—There’s been a marked shift in Miami’s condo market. With foreclosed properties nearly bought up and inventory low, it’s officially a seller’s market. Prices are becoming competitive once again. So says RelatedISG International Realty’s second quarter Miami Market report.

Craig Studnicky, principal of RelatedISG, tells GlobeSt.com he’s seeing more Northeast buyers, as well as Asian buyers, infiltrating the market. With appraisers now valuing condos at a higher price as recent sales prices have risen, buyers can get better mortgages with less money down. Still, he says the biggest surprise came from the Multiple Listing Service, or MLS.  

“Inventory in MLS is down from the first half of 2012 compared to 2011—down by more than 20%,” Studnicky says. “Prices are up by approximately 15% in one year. Furthermore, the days on the market are significantly down from an average of 134 days from a listing to a sale in 2011 to 49 days from a listing to a sale in 2012. Unsold inventory is declining at a much faster clip than any real estate professional expected this year.”

Studnicky expects the second half of this year to see a continued decline in listing inventory from MLS as well as continued increases in prices. That’s because while about 32,000 condos were built in South Florida from 2005 through 2008, no new supply has hit the market since then.

“It takes two years before new condos are ready for occupancy from the beginning of construction, typically,” Studnicky says. “Nothing new in the form of new supply was started until this year, with Apogee Beach in Hollywood, Bellini in Aventura, and MyBrickell on Brickell. A total of 312 units will be delivered in 2013, a five-year gap from the delivery of the last new condos in South Florida and not much supply, really.”

Here’s his point: South Florida has never seen a five-year pause on new construction starts for condos. According to RelatedISG, every submarket in South Florida is now sold out of standing developer inventory from the 2005-2008 boom—except for Downtown Miami.

“Expect price increase in the second half of 2012,” Studnicky says. “All inventory, developer and MLS is declining in numbers and demand remains constant from South America, Central America, Canada, Northeast U.S., and parts of Europe.”