Miami Condo Glut is Coming to an End – reports The Wall Street Journal

November 2, 2011 by Lucas Lechuga

Icon Brickell

In an article entitled “Miami Condos on Upswing,” The Wall Street Journal reported late Tuesday night that the Miami condo glut may soon be over as evidenced by recent sales activity. The article points to a 539-unit bulk deal at Midtown Miami which recently sold for $110M, or $183 per square foot. More importantly, the “acquisition represents one of the last remaining 100-plus unit bulk condominium opportunities in all of South Florida”.

The article also states that Icon Brickell, with 1,796 total units, now has fewer than 20 units remaining as of October and is expected to sell out in November. In my opinion, the sell-out of Icon Brickell will ultimately be heralded as the true end of the Miami condo glut. Icon Brickell was depicted, by the media and everyone alike, as the poster child of condominium over-development in Miami and, to me, is as symbolic as it gets. Once the last unit at Icon Brickell closes, those with real estate interests in Miami might as well bust out their vuvuzelas and make some noise because the biggest hurdle will have been overcome for the Miami real estate market.

The recent launch of sales at Paramount Bay is mentioned as well in the article. Paramount Bay launched sales around mid-October. I was recently told that 70 units at Paramount Bay have now either closed or are under contract. More surprising, is the fact that only 4 of the 11 total penthouses remain. None of the penthouses at Paramount Bay with the large terraces (1945 square feet to 2949 square feet) remain available. Given that terraces of that size are rather unique in Miami, there was a mad rush by buyers to grab those. Prices for penthouses at Paramount Bay with the large terraces were priced around $2.1M to $2.9M – a good indication that the luxury market in Miami is also performing stupendously.

Marquis Residences, a 292-unit luxury condo development located in Downtown Miami which was not mentioned in The Wall Street Journal article, hit an important sales milestone recently. I was informed last week that Marquis Residences is now over 75% sold. Remaining 2 bedroom condos start at $590,000 while remaining 3 bedroom condos start at $860,900. A few penthouse condos at Marquis Residences also remain available for sale.

Vizcayne, another condo development in Downtown Miami with remaining inventory, is now over 50% sold. Earlier this week, it was announced that no-doc seller financing is now available with 30% down to qualified buyers. That should make Vizcayne a very popular option among investors once this news is disseminated. Vizcayne prices range from $200K to $2M.

Inventory of new condos in Miami continues to dwindle with each successive month. By all accounts, it very well seems that 2011 will go down as the year that the Miami condo glut came to an end. With the worst behind us, I see 2012 filled with announcements of additional pre-construction condo developments throughout Miami. It will be the year that construction cranes will once again grace our skyline to fulfill the future demand for condos in Miami.

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25 Comments on "Miami Condo Glut is Coming to an End – reports The Wall Street Journal"


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Anonymous
Gixxer1000
4 years 10 months ago
Brickell condo sale prices up 18% in 2 years By Marilyn Bowden The cost of condos on Brickell has been rising steadily over the past couple of years, but they’re still seen as bargains, brokers say, particularly among the foreign investors whose cash purchases continue to buoy up the market. “Condos are moving,” said Carlos Villanueva, district sales manager for The Keyes Co. “What happened is that increasing affordability three years ago combined with a significant level of inventory, and that made purchasing a condo more attractive.” Buyers rushing to grab units at bargain prices pushed up demand, he said,… Read more »
Anonymous
Renter Tom (now owner)
4 years 10 months ago

“Miami Condo Glut is Coming to an End – reports The Wall Street Journal”

LOL – ya, right…. – LOL

Anonymous
Renter Tom (now owner)
4 years 10 months ago

Real (as opposed to nominal) incomes are down and unemployment is projected to go up a bit. One also has to realize that many floplords (flippers stuck with unwanted condos) are renting them at rates that they have to pay into each month since the rents don’t cover all the costs. Nonsense I say…nonsense.

Anonymous
Gixxer1000
4 years 10 months ago

“Of the 23,000 new units that were built during the boom in downtown-Brickell, she said, fewer than 1,500 remain unsold.
“What’s interesting,” Ms. Lamadrid said, “is that for the most part, all the inventory that closed from 2009 to the present has been closed without any significant financing. So there is no shadow market in Brickell.
“Occupancy is super-high, about 90%, and rents are going up steadily. Miami is now a city that is very much under-leveraged.”

It’s not nonsense its called math.

Anonymous
Makes_Me_Think
4 years 10 months ago

Some are deniers and no amount of evidence will change their minds. They just don’t deal with reality as you and i know it. If all this is none sense then why did he rush out to buy 2 condo?

Anonymous
Renter Tom (now owner)
4 years 10 months ago

Rush out?!?!? Get real. It took me 2.5-3 years to find the right deals that I was comfortable with. That is hardly “rushing”. There are a lot of bad deals out there…probably more bad than good. I hope the condo market does get restarted but in my opinion there is already enough inventory that there will be no price boom regardless. Oh well, feel free to gobble these condos up guys…

Anonymous
msmith2011
4 years 10 months ago
People keep believing propaganda.. In a state that is completely broke, where people can barely afford their groceries, it is a joke to talk economic turnaround. All occupied units are rented by the developers or by potential flippers with foreign money. Sales are up because of an artifical deflated US dollar. Since most people here seem to worry more about how much money they have ” potentially made” since 2008 and not about real economic recovery, I guess it is useless to have any kind of real discussion here. Miami is just avery cheap city compared to the rest of… Read more »
Anonymous
Joe
4 years 10 months ago

The only deniers are the fools who think Miami has turned into some sort of paradise in the past 2 years rather than a haven for foreign money launderers. Were these condos bought by people who moved to Miami because of new jobs? No. They were bought by foreigners for whom the weak dollar made the deals more attractive. Only a fool or a liar would argue otherwise.

Anonymous
Makes_Me_Think
4 years 10 months ago
Uh, I don’t get it. Who said anything about miami being a paradise? I don’t ever recalling making any statements about who is buying those condo’s. Foreign buyers are buying for whatever reason, you are the only one who claims to know who is buying and for what reason. All the evedince shows is that oncce empty condos are now being sold, Once desolate streets are now crowded, bars and resturants have opened and are thriving. The fools are the ones who continue to deny that fact. They claim to know of massive waves of upcoming foreclosures but run out… Read more »
Anonymous
poorandunemployed
4 years 10 months ago

MMT

How many condos have you or your cheerleaders have purchased in last two years? If the market is Soooooooooooooo good as you say, why leave a winning lotto ticket on the table for someone else?

Only in Miami!

Anonymous
Makes_Me_Think
4 years 10 months ago

poor, unemployed and a fool to boot.

Anonymous
4 years 6 months ago

A lot of “haters” out there….
The reality is, the condo market has peaks and valleys, and although we may not see prices rebound overall for a while, demand begets demand. It is a monkey-see, monkey-do world….

Anonymous
Gixxer1000
4 years 10 months ago
I’m not claiming that Miami is any paradise. But in mid to late 2009 it seemed as though prices were going to go higher. I was originally wrong because I was making statements about Miami as a whole and not east of I95. I then realized that these are two VERY different markets and I was only paying attention to the market east of I95. Now two years later he reports are out saying how places like Brickell are up 18%. I’m not claiming its a paradise or that I can read the mind of foreign buyers. But regardless of… Read more »
Anonymous
Visionary
4 years 10 months ago

Gixxer,I need your advice,thanks.

Anonymous
Renter Tom (now owner)
4 years 10 months ago

“Now two years later he reports are out saying how places like Brickell are up 18%.”

– From what? Foreclosed bulk sold condo prices? Oh so easily fooled… My advice, do your homework when buying a condo. Research the building…research research research…to make an informed decision. Don’t rely on the hype. Miami is filled with people trying to steal your money…

Anonymous
Joe
4 years 10 months ago
Right, all these “Condo prices up __ percent” headlines are nonsense. They remind me of Ross Perot’s old quip about a homeless guy having $1 in his pocket, finding $1 on the sidewalk, and having his net worth increase 100%. Without a proper understanding of the baseline, the %s mean nothing. As for the Miami condo market, the buyers went from domestic flippers to foreigners buying because of the weak dollar. Nothing has fundamentally changed about Miami since 2005 or 2009. Latin Americans have loved Miami for decades, but they weren’t the one driving the r.e. boom. Now they’re using… Read more »
Anonymous
Gixxer1000
4 years 10 months ago
There is no baseline need to tell up from down. Joe and Renter Tom were both saying prices were going to continue to go lower from the then low bulk sale pricing. Prices are now higher. Who cares what it went up from. The point was clear. You were saying if one bought a condo in 2009 they were stupid and the price on their investment would go down. Now we know that not to be true and the price went up. Now you guys are trying to say well the price it went up from was extremely low or… Read more »
Anonymous
F-35
4 years 10 months ago
No matter what toms, joes and drews of the world are saying. Miami needs 2000 condos built every year to keep up with 1%/yr population growth, as well as attrition of existing housing stock. So in a year or so the overhang from the previous boom will be gone. And there will be no new meaningful supply coming online for another couple years. Anyone who waits for that very moment to buy their home will always remain a loser. I don’t even know why someone not bored out of their mind would want to argue with anybody called “poor and… Read more »
Anonymous
Joe
4 years 10 months ago

“Every piece of stats shows incredible recovery in Miami RE market, so what if three or four vocal dimwits want to pretend otherwise?”

— Yes, and “every piece of stats” in 2005 and ’07 showed big gains, too. Don’t you fools ever learn? A run-up in r.e. prices absent an increase in employment, job creation, real income, etc., is a BUBBLE. The last one was a credit bubble; this one is a foreign-buyer, weak-dollar bubble. Only a bunch of Miami lunatics could believe that the r.e. market can somehow be detached from all other economic indicators and benchmarks.

Anonymous
owneratinfinity
4 years 10 months ago
guys, I think you have forgotten how I have proved that brand new units that were bought from the developer at the end of 2009 and the first couple months of 2010 in Infinity have went up a lot more then 18%. I was not the only person that brought a condo in infinity during that time. At least 30-40 other peolpe bought when I bought and they got the same good deal as I got. Remember I sold my unit after owning it for less then 2 years for 45% profit (that 45% more then I paid). So there… Read more »
Anonymous
What Do You Think
4 years 10 months ago

Everybody shares a valid point at this site. This is why I keep coming to it and I learn. Who could have taught me about a “foreign-buyer and weak-dollar led bubble”? This is a fabulous site.

Anonymous
What Do You Think
4 years 10 months ago
Miami condo, home sales on pace to hit record highs By Patricia Hoyos Largely stimulated by international buyers, the Miami-Dade housing market continues on the right path to end the year with record numbers of home and condo sales, selling more units than during the market’s peak. According to data from the Miami Realtors Association, sales of existing single-family homes rose 46% in September compared to September 2010. Sales of existing condos also increased 58% compared to last year. Statewide, sales rose about 10% for single-family homes and condos. Michael Pappas, president and CEO of The Keyes Co., said, “Keyes… Read more »
Anonymous
Joe
4 years 10 months ago

Just as I’ve been saying: international buyers and all cash (due to weak dollar). Miami’s underlying economic metrics have had nothing to do with it, which is why it’s a precarious “recovery.”

Anonymous
Makes_Me_Think
4 years 10 months ago
Keep telling yourself that. Just like you have beem saying there is nothing special about Miami and S.Fla. in general. Others have decided you are wrong and a dimwit to keep up this foolish argument in the face of what has been going on in the market. Keep singing your song about how there are no jobs and the economic metrics, corruption,bla,bla,bla….may be it is time to get back to your silly rants about scums that reside in miami and how it it a banana republic. At least you won’t look so foolish and might get a few to agree… Read more »
Anonymous
Joe
4 years 10 months ago

Are you insane? The story specifically says the buyers are overwhelmingly foreign and using cash. Why are you attacking me for mentioning FACTS that a newspaper confirmed? Get back on your meds.

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