Miami Condo Deal Pace Slows With 3,400 New Units Left

MIAMI—After a raging comeback that few expected, new condo sales in Miami are cooling off a bit—at least for now. Quarter-over-quarter, the average price per square foot dropped 10 percent in the second quarter of 2012 in South Florida’s seven largest coastal markets.

Despite the slowing sales in the quarter, the inventory of unsold developer condo units from the last boom has dwindled down to 3,400. So says a new report from CondoVultures.com.

“This is a testament to the foreign buyer and the discounting the banks ultimately agreed to,” Peter Zalewski, principal at Condo Vultures, tells GlobeSt.com. “What’s concerning is the fact that there’s 10,500 new units proposed. There are 12 towers under construction in addition to one that has already been delivered. It should be gone by then end of 2013 and these developers are working in expectation of starting to deliver new condos in 2014.”

With the second quarter of 2012 developer sales, CondoVultures.com reports buyers have now purchased nearly 45,400 condo units for about $22.4 billion in South Florida's seven largest coast markets between 2003 and the second quarter of 2012. The total number of unsold new condos does not include any of the more than 8,000 units that were purchased in bulk transactions by investment groups that plan to one day resell the units at a premium.

If everything goes as planned, Zalweski says it should be a seamless transition from old condo inventory to new condo inventory. The big question mark is whether foreign investors will continue flocking to the South Florida condo market at the same pace as they have over the past two years.

“We anticipate Canadian buyers are going to become a bigger player as they go forward because their dollar is still very strong and the condo market is starting to sideways,” Zalewski says. “That’s a good sign. Europe is kind of a mix. You are starting to see the euro climb up again. But there is some troubling news coming out of Latin America. If the international market doesn’t stay firm, there could be a hiccup.”