South Beach Condo Index – November 2007

November 14, 2007 by Lucas Lechuga

Let's go to South Beach

The following data was collected on Sunday, November 11, 2007. The average price per square foot of condos currently listed in the following 19 developments in South Beach dropped from last month’s average. In fact, it even dipped below September’s average. It went from $889.83 per square foot, in October, to $886.71, for this month. The September average price per square foot was $887.60. The weight-adjusted average also slid slightly to $773.67 from last month’s weighted average of $773.73. Below, you will find the average price per square foot of condos listed in the following 19 condo developments in South Beach:

Tops Are Not Allowed Beyond This Point

The average price per square foot of condos sold over the previous six months has gone down from $787.01 per square foot to $775.74. Once again, Meridian Lofts didn’t have any closed sales within the last six months which is why you will find the “N/A” below. If Meridian Lofts were included in the average this month, at its previous average price per square foot of $434.78 in September, then the average price of condos sold in this index would have dropped from $768.47, last month, to $757.80, this month. Below, you will find the average price per square foot of condos that have sold within the last six months in the following 19 developments in South Beach:

  • 1500 Ocean Drive – 1500 Ocean Dr | 33139 | $946.39
  • Bentley Bay – 520 & 540 West Ave | 33139 | $654.75
  • Bentley Hilton – 101 Ocean Dr | 33139 | $1,056.76
  • Continuum South Tower – 100 S Pointe Dr | 33139 | $1,050.00
  • Cosmopolitan – 110 Washington Ave | 33139 | $521.61
  • Courts at South Beach – 140 Jefferson Ave | 33139 | $456.52
  • The Decoplage – 100 Lincoln Rd | 33139 | $508.06
  • The Floridian – 650 West Ave | 33139 | $551.03
  • Grand Venetian – 10 Venetian Wy | 33139 | $465.92
  • Icon South Beach – 450 Alton Rd | 33139 | $777.97
  • Il Villaggio – 1455 Ocean Dr | 33139 | $1,217.60
  • Meridian Lofts – 2001 Meridian Ave | 33139 | N/A
  • Mirador 1000 & 1200 – 1000 & 1200 West Ave | 33139 | $397.71
  • Murano at Portofino – 1000 S Pointe Dr | 33139 | $1,040.34
  • Murano Grande – 400 Alton Rd | 33139 | $721.85
  • Portofino Tower – 300 S Pointe Dr | 33139 | $1,014.26
  • Setai South Beach – 101 20 St | 33139 | $1,494.92
  • Waverly at South Beach – 1330 West Ave | 33139 | $475.99
  • Yacht Club at Portofino – 90 Alton Rd | 33139 | $611.65

As with the Brickell and Brickell Key condo indices, I have provided the graph below to make it easier for everyone to make sense of the statistics above. If you can’t read the numbers below then you need to upgrade your glasses to a set of binoculars. Otherwise, right-click and save the graph below and blow it up to as big as you’d like.

South Beach Condo Index November 2007

The first column, to the right of each condo development’s name, is the difference in the average sales and list prices for the statistics at the top, expressed as a percentage. With the exception of Portofino Tower and The Floridian, the average sales prices are well below the average list prices in these 19 developments. Portofino Tower had a condo sell for $1,505 per square foot on June 29, 2007. Once that transaction falls off the average in January, we shall see Portofino Tower begin to show its true colors. Average list and sales prices at The Floridian are merging together because the high number of short-sales that are available at The Floridian. Once a few of these actually close, the average sales price will fall well below the average list price.

The second column is the number of active listings in each development currently in the MLS. The third column shows the percentage that these listings represent over the total number of condo units in each development. The cells highlighted in green reveal those developments that have active listings that represent less than 10 percent of the the overall units in the building. I find this to be a very healthy number. 1500 Ocean Drive, Courts at South Beach, The Decoplage, Grand Venetian, Il Villaggio and Murano at Portofino fall into this territory.

The 10-15 percent range is considered average while the 15-20 percent range is beginning to approach dangerous levels. The ones highlighted in red reveal those developments that have active listings that represent over 20 percent of the overall units in the building. This indicates that the danger zone has been breached and caution should be heeded. Of the 19 condo developments in the South Beach Condo Index, Bentley Bay, Murano Grande and Setai South Beach fall into this red zone area.

Who's Buying Me Dinner Tonight at The Setai?

The fourth column shows the number of pending sales while the fifth column displays the number of closed sales since October’s South Beach Condo Index. As you can see, there are 31 pending sales in South Beach. There’s been a total of 13 closed sales within the last month, which matches last month’s figure. Icon South Beach, with 3 closed sales, is beginning to show some spirit. There was a recent article in the papers that stated that former NFL quarterback Michael Vick, recently acquired a pricey condo at Icon South Beach. I’m pretty sure that the neighbors won’t be pleased by all of the dog barking until he begins to serve his time. Woof, woof!!!

The sixth column shows you the difference in the average list prices from this and last month’s, expressed a percentage. Those highlighted in red reveal those condo buildings which had a drop in their average list price, those highlighted in green show those that had an increase while those highlighted in yellow reveal a stalemate from last month’s figures. As you can see, Meridian Lofts had an 11.44 percent drop. That’s probably because it hasn’t had any closed sales within the last six months. Time to drop prices!

The seventh column reveals the difference in average sales prices from this and last month’s, expressed as a percentage. The color scheme remains the same. Sales prices at Bentley Bay spiked up 7.33 percent because a transaction that took place on May 8, 2007 at $476 per square foot fell off the average. The Setai South Beach took a beating this month, with a 9.71 percent drop from last month’s average. This is mainly attributed to a Penthouse unit that sold for $1,851 per square foot falling off the average this past month.

Pending sales have increased to 31 from last month’s figure of 25. It looks like the off-peak months have begun to knock boots with the on-peak months. Just wait until January. I promise that you’ll begin to see more pending and closed sales during those months.

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17 Comments on "South Beach Condo Index – November 2007"


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Anonymous
8 years 10 months ago

Lucas – so it seems that you believe activity is picking up. Did you read in the WSJ last week that a Setai unit, actually the entire 40th floor, went under contract for $24M?

Anonymous
JS
8 years 10 months ago
I suspect it’s an anomaly, Lucas. Am afraid to say that the rich and super-rich are scaling back their discretionary spend, not increasing it. We’re in wealth preservation mode not expenditure mode now. The Sotheby’s auction in New York for art last week gives a little flavor of this but it extends to $1m+ homes too. Take a look at Toll Brothers too. Average cancellation price $788k, average new contract signing about $550k. South Beach was always going to be last to crack but crack it will, and its status as second home (and therefore discretionary) will hurt it not… Read more »
Anonymous
perez
8 years 10 months ago

Lincoln Road awful, tired and tawdry? Lincoln Road is a wonderful pedestrian friendly area. Does South Florida have a better outdoor place to stroll day or evening? I doubt it.

But back to your post. Didn’t Bentley Bay’s developer go through a foreclosure or backruptcy? I love the sail like design of the buildings. The first time I saw them I thought that was so cool.

Anonymous
JS
8 years 10 months ago

I think those that run Miami Beach need to travel a bit more. I am sorry but Lincoln Road (all of it, right from Collins) isn’t world class anymore or even close.

Anonymous
JM
8 years 10 months ago
I’m European, and the majority of my compadres do not think of Lincoln Road as world class anything. Not even close. Why should they? It’s a tacky bunch of open-air taco/sushi/cheap restaurants, nothing more than that. Lucas, you run an insightful blog, but as I have stated before and will annoyingly state again, the stats do not make sense. First, the $2/SF drop in prices. This is nonsense; people are walking away from 20% down three years ago. I know you are ultra-interested in this market, but the month-on-month figures tell nothing, except that nothing is closing. If nothing is… Read more »
Anonymous
JS
8 years 10 months ago
@JM – generally agree though it’s fairly normal in a falling property market for liquidity to dry up completely and loss aversion has proven to be more important than supply/demand in setting prices in the short to medium term. I like South Florida but when you make people who don’t live there (and therefore consume the State’s services) pay the majority of the budget (including schools – what a ridiculous joke), it’s eventually going to come and bite you in butt. And I’m really sorry the lack of investment in the beach areas is stunning. Why do you think 20%… Read more »
Anonymous
8 years 10 months ago

JM,

You must know something that I don’t know. This is only the fifth month that I’ve been doing the South Beach Condo Index. I highly doubt that prices have fallen 30% in that time like you say. The reality is that prices have fallen 20-30% from the end of 2005. I’m sure that my index would shown something along these lines if I had begun to track the South Beach market in 2005.

Anonymous
8 years 10 months ago

Tom,

I hope that Setai transaction for $24M closes. It’ll make for an interesting story.

Anonymous
JM
8 years 10 months ago
Lucas, Sorry, I wasn’t very clear. I certainly know less than you do about the Miami market. I was not referring to the last five months. I meant within the last two years, exactly as you say, although I believe 30% is closer to the actual figure. I think my post was clear on the time line – that month-on-month figures don’t tell us much right now, but sorry if it wasn’t. Where I was wrong was in saying the stats don’t make sense. They make perfect sense in a quagmired market over a short time frame. I really enjoy… Read more »
Anonymous
8 years 10 months ago
JM, The South Beach condo market has shown a 1.9% drop within the last 5 months in my condo index, or 4.56% drop on an annualized basis. The real number is probably around 7-10% for 2007. As you say, however, it is very difficult to gauge because of the illiquid real estate market that we’re seeing right now. When list prices begin to look realistic then we’ll start to see some activity. It won’t happen until more foreclosures sell and those transactions act as comps for the rest of the building. It’s going to get worse before it gets better.… Read more »
Anonymous
perez
8 years 10 months ago
Miami Beach’s asking prices may have gone down somewhat, but don’t hold your breath too long. Average condo Sold Price per Sq Ft went from $498 in 9/06 to $587 in 9/07. Granted due to the lack of sales volume no one should rely exclusively on this stat to gauge the market. Foreclosure activity has increased, but not like other places. Mirador’s volume is fairly high, but as a percentage of the total units there, it’s no Brickell Club, Vue or Jade. I heard a lot of criticism of Lincoln Road, but I’d like to hear what other South Florida… Read more »
Anonymous
8 years 10 months ago

Miami is a great location, especially in the Winter.

I just don’t believe that these prices will hold up and I expect to see 250-300 a sq foot by 2010. I expect a 50% drop.

Lucas will make money either way, just will have to sell 2 condos to get the same profit he does now off 1.

Anonymous
Jaime
8 years 10 months ago

I appreciate the data based approach of this blog.
The problem is that the data hasn’t caught up with the upcoming correction.

But Lucas can’t be faulted for that.

Keep up the great work

Anonymous
sam
8 years 9 months ago

Great site. Great blog/comments. 50% drop? I wonder if it’s ever happened before? Not that it matters. Anybody know when units at Continuum II are scheduled to start closing?

Anonymous
Al Murray
8 years 9 months ago
Please everyone knows that the condo prices are falling and will continue to fall at a faster rate especially during the slowest months of Jan to March. The higher the selling price the bigger the drop will be especially for properties listed over $1 million. A buyer would have to be extremely stupid to buy now. Most likely for the entire 2008 year since they would be paying more than they would if they wait. People who have millions to spend cannot all be that stupid! There is a glut of condos. Because of greed builders built so many thinking… Read more »
Anonymous
daniel
8 years 8 months ago

just found site and has great blog! i’m looking to buy a small hotel in south beach and im aware that prices are expecting to fall (per sq ft) but do you think that south beach hotel property real estate should keep falling heavily during 2008?
There is no reason for tourism to drop and less people to visit/stay in the area but I just wondered if anyone has an opinion of this?
(im from the UK and wish to move to Miami)

Anonymous
Me
8 years 6 months ago

With all respect there is not much class in the US in general. South beach which I love is a party place full of drug s and night life. Let be honest it aint no south of France. On washington you see homeless people and ocean drive is like a ghetto. South of fith you have all of the drunks a that little Cuban market. Licoln road is fun and again I love it but it’s pretty dirty packed with weird people and beach bums. The restaurants are tourists traps. The only place that is nice is sega fredo

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