Miami & Miami Beach Condo Trends – April 2010

April 26, 2010 by Lucas Lechuga

They say numbers don’t lie.  If that be the case, one message of truth shines through in the inventory figures below when compared to the ones I calculated exactly nine months earlier for Miami-Dade County condos: sales up, supply down.  I compiled the figures below on April 22, 2010 from the MLS in the exact same manner as I had the night of July 23, 2009.  Below, you will find three sets of spreadsheets and graphs: the first pertaining to the inventory of condos throughout Miami-Dade County; the second to those residing only in Miami while the third concentrates on those residing in Miami Beach.

Once again, I divided the supply figures into seven price ranges and included only sales that have closed within the past six months.  The last three columns show the percentage change in those statistics when compared to those published nine months earlier for July 2009.  It should be rather apparent, with a few exceptions, that the overall pattern is that condo inventory has decreased and closed sales have increased quite considerably within the past nine months.  For example, overall condo inventory in Miami-Dade County has decreased 13.78 percent while closed sales have increased 19.23 percent during that time frame which led to a 27.69 percent decrease in the overall months of supply.

The figures in the images below may be a bit difficult to read so I also published the workbook for this month’s Miami & Miami Beach Condo Trends in its entirety.  Be sure to check it out.  The worksheet and graph tabs can be found along the bottom of the workbook.

Below, you will find the Miami-Dade County condo supply and sales figures for April 2010:

Dade County condo spreadsheet - April 2010

Dade available condos graph April 2010

Dade closed condos April 2010

The following statistics encompass only those condos located throughout Miami (not other areas of Dade County such as Miami Beach, Aventura, Sunny Isles Beach, etc.):

Miami condos spreadsheet April 2010

Miami available condos graph April 2010

Miami closed condos graph April 2010

The following statistics encompass only those condos located throughout Miami Beach:

Miami Beach condo spreadsheet April 2010

Miami Beach available condos graph April 2010

Miami Beach closed condos graph April 2010

Market pessimists will likely argue that the statistics above do not incorporate developer inventory.  Commonly known as shadow inventory, developer inventory is typically not recorded in the MLS.  However, these people need to bear in mind that closed developer sales also are not included in the figures above.  Obviously, shadow inventory was a bigger problem nine months ago than it is today.  A more valid argument should point to the home buyer tax credit being the catalyst that increased sales within the past nine months.  Personally, however, I feel that the the home buyer tax credit has had a greater impact on the single family home market than the condo market.  It has played a very insignificant role in our business and I have spoken to other real estate agents who specialize in condominiums who have encountered the same.  With the home buyer tax credit expiring this Friday, we should be able to see within the next three months how instrumental of a role it has played in the increased sales numbers we’ve witnessed.

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125 Comments on "Miami & Miami Beach Condo Trends – April 2010"


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Anonymous
why bother
6 years 5 months ago
Owner at infinity, you said “I was told that the deevloper/Starwood is in no hurry to sell out the building since they have a interest free loan from FDIC” Infact same holds true for Paramount. It seems they have such a sweet heart deal from the holders of the note, that the current owners of Paramount can afford to just sit on the property for many months with out having to do any major discounting. That is why I do not expect Paramount to be less than $400/sf when they do decide to open the building for sale. They are… Read more »
Anonymous
owneratinfinity
6 years 5 months ago

why bother,

I agree I think that is what they will try to do.

Anonymous
6 years 5 months ago

12% unemployment…that is all.

Anonymous
gables
6 years 5 months ago
seems like the market activity is dominated by the under $250k price range. since quite a bit of inventory is caught up in Everglades, Icon and Paramount, which expect to price way outside of this range, any idea, based on the numbers above, how these units will fare in the next year? remember, the old numbers were calculated during the worst financial crisis in decades. one would expect better numbers today compared to then-we are no longer in a total collapse but sputtering forward. what would be really interesting is to see some numbers from the 2001-2003 years, when we… Read more »
Anonymous
Elvis
6 years 5 months ago
I am a skeptic, but numbers don’t lie! Do these numbers count bulk sales? I know since July last year bulk sale activity has been pretty common. As gables pointed out the large majority is <$250K prices. I have always argued affordability (which is different from the ability to get loans.) <$250K is affordable and even the <$500K for dual incomes or a single high income earner. I guess my confusion is the large spread between available prices and sold prices. Regardless it is good to get these buildings filling up. You can see downtown starting to shift from sketchy… Read more »
Anonymous
Gixxer 1000
6 years 5 months ago
gables, The information I have for condos only goes back to 2005. But I have data for single family homes going back further. This should give you some ideal about sales volume. Yearly Sales Volume SFH 2000 11,718 2001 11,491 2002 12,342 2003 12,571 2004 12,622 2005 11,016 2006 8,692 2007 5289 2008 4,379 2009 6,685 Condos 2005 13,009 2006 9,822 2007 5,772 2008 4,580 2009 6,854 As you can see the activity today is less than it was 8 years ago. But contrary to your argument that is a good thing. This means we still have room for improvement.… Read more »
Anonymous
gables
6 years 5 months ago
as we ramp up consumption of these units, the question begs: can we continue to devour an equal or more units per month into the future? remember investor units really become shadow inventory unless the investor is truly committed to renting long term. otherwise it’s a unit that will be back onto the market in a couple of years. but the numbers certainly indicate within a few years the downtown area will be a much better destination for living than a few years ago. now we search for what premium is to be had for that location???
Anonymous
Gixxer 1000
6 years 5 months ago
I guess the question is why would you think we couldn’t sell an equal number or more units per month into the future. Again your questions are more emotional and not based on the market. In a normal market we sell about 20,000 homes per year. We fell into a recession at which point we were selling 9,000 homes per year given that economic climate. The economic climate has gotten better to the point where we are selling 13,000 homes per year. If the economic climate is going to stay the same or get better then why would the number… Read more »
Anonymous
6 years 5 months ago
Two points that I would like to append to the information offered in this article. There are still market distortions being created at the bequest of legislative entities in lieu of banks. These are anomalous and must go away at some point. Anyone taking the other side of that bet (read long real estate), is actually correlated with dollar erosion and all the minutiae that go along with it (another post entirely). There was a very compelling revision in the HAMP legislation that has created a severe backlog in foreclosure proceedings. I can only speculate on this point but I… Read more »
Anonymous
Elvis
6 years 5 months ago

I think as long as we don’t build large volumes of units the investor units and shadow inventory won’t be a problem.

We can’t overlook the fact that “historic” data includes a large number of so called investors buying properties to flip them and make a quick buck. I would bet the days of individuals buying 3 or 4 units and flipping them are over. There are still real investors who are making money today via bulk sales and real investments.

Anonymous
gables
6 years 5 months ago
Gixxer, where is the 20,000 units a year from? Does it include years 2003-2008? Would like to know what the averages are from say 1998-2003-these will be less biased by investors and mortgage fraud of the past boom years. Any idea of the number of investor buys in the preboom years versus today? My understanding is that many of todays buyers are investors-was it the same a decade ago? If not, the current buy rate is not sustainable. As i said before, investor purchased units are tricky to count because they are expected to return to the market sooner rather… Read more »
Anonymous
gables
6 years 5 months ago

gixxer, remember the local south florida economy is in the tank and far from returning to the preboom days. Unemployment is reported anywhere between 10-12% rather than 5-6% in days of yore. There is a certain minimum housing number that must occur do to job transfers, family upgrades, etc that will occur regardless of economic conditions (absent the complete disaster of 2008-2009 which is beyond bad economic conditions). From your numbers, the new normal is probably closer to 13,000 than 20,000.

Anonymous
Elvis
6 years 5 months ago

gables, I think gixer is including residential+condo in the 20,000 number.

Anonymous
SouthBeacher
6 years 5 months ago

Do you guys think the Miami government will be smart enough to not approve (or issue permits ) for new projects in Downtown for the next 5 years? If they don’t allow new development, Downtown Miami will be more than fine. However if they allow new construction on every block again…

Anonymous
6 years 5 months ago

Gixxer, you accuse someone of being irrational and emotional, your ten year sample hardly produces anything more than the illusion of rationality. Magnifying the danger is the fact that your sample size happens to be the biggest asset class dislocation ever witnessed. Any metric that is a function of real estate will be an outlier, any line chart makes this very apparent.

http://finance.yahoo.com/q/ta?s=^TNX+Basic+Tech.+Analysis&t=my

This is the 10 year treasury, what obvious distortion do you see and what pocket of time does it coincide with. Overlay that chart with your run rate sample.

Mean reversion is a bitch.

Anonymous
Drew
6 years 5 months ago

LSente:
How dare you question Gixxer’s methodology. Just analyze his “driving 65 mph…and then dropping speed…and then going 55 mph….”

Its so simple. The Miami real estate market is just like physics.

Anonymous
Gixxer 1000
6 years 5 months ago
gables, As Elvis pointed out I was simply adding SFH and condos. I wasn’t trying to be exact but instead just trying to prove a point. In the current economic climate, 12% unemployment and current prices we seem to not only be able to sustain the current sales volume but are increasing. Your questions about investors is really pointless. There is a shortage of rental property downtown. There were a total of 22,079 condo units built downtown. At the same time there were only 1,189 apartments built downtown. A large portion of these condos are going to remain rental units… Read more »
Anonymous
gables
6 years 5 months ago
Gixxer, those numbers show a strong down trend in the past 5 and 10 years. In particular, the past five years. And this is when supply (especially of condos) exploded upward. Does it not concern you that sales are nearly half of what they were 5 and even 10 years ago, amid an historic rise in supply? Once investors run out of money (and eventually they will after buying at great prices), we are left with regular homebuyers, who will be operating in tough and increasingly tougher credit markets. As interest rates rise (my bet is they will), you will… Read more »
Anonymous
6 years 5 months ago
Simple question, how long can QE and ZIRP continue. There is your endgame, this is the argument that we are having, everything else is anecdotal. Fiscal/monetary policy == right now they seem to be a perpetual elixir, a simple remedy. They must stop however, how close to punishing rates and massive increases in crude/other inputs is when the rubber hits the road. So banter back and forth about econ data, but remember, we are on a clock and normal is a moving target. Gixxer, you seem to be a diligent student and all the best to you in your endeavors.… Read more »
Anonymous
Joe
6 years 5 months ago
I hate to always be a contrarian, but I’m having a hard time seeing what Lucas is so fired up about. Are we really supposed to be thrilled Miami is down to a 12-month inventory of condos worth $0 to $250,000? Is that what the allegedly “upscale Miami market” has come to — a celebration of bargain-basement sales? The very same charts show a 26-month inventory of condos worth $250,000 to $500,000. These are the very same units that, just 2-3 years ago, investors and realtors routinely derided as “starter homes” and “cookie-cutter condos.” Even worse, the chart shows a… Read more »
Anonymous
Gixxer 1000
6 years 5 months ago
gables, “Gixxer, those numbers show a strong down trend in the past 5 and 10 years. In particular, the past five years. And this is when supply (especially of condos) exploded upward. Does it not concern you that sales are nearly half of what they were 5 and even 10 years ago, amid an historic rise in supply?” You sure do a have a funny sense of logic. Sales are half of what the were 5 or 10 year ago because the economy is worse than what it was 5 or 10 years ago. Once the economy gets back to… Read more »
Anonymous
gables
6 years 5 months ago
A nice Goldman giggle posted on CR “You want the truth? You can’t handle the truth. Son, we live in a country with an investment gap. And that gap needs to be filled by men with money. Who’s gonna do it? You? You, Middle Class Consumer? Goldman Sachs has a greater responsibility than you can possibly fathom. You weep for Lehman and you curse derivatives. You have that luxury. You have the luxury of not knowing what we know: that Lehman’s death, while tragic, probably saved the financial system. And that Goldman’s existence, while grotesque and incomprehensible to you, saves… Read more »
Anonymous
gables
6 years 5 months ago
Gixxer, the economy leading up to the bubble was fueled on credit and not normal at all. From around 2000 until the bust, we had stock/tech and then RE, both bubbles which created environments which were not normal. we will be lucky to have a normal economic environment which matches that period. so i ask the question, if we do return to a normal, what will that level be? we have not had a normal economic environment in quite a long time. to think we will only drop back to the early 2000 time period is ignoring the bubbles that… Read more »
Anonymous
Gixxer 1000
6 years 5 months ago
Joe, Lucas is fired up because he know how to actual read and understand information. Look at the last time he posed numbers. If you look at the break out for just Miami and look at the $250k -$500k range which is where most downtown condos fall you can see that there was a 53.62 month supply. Now if you look at the same segment today you see that there is a 32.33 month supply. That’s a difference of 21.29 months of supply in just 9 months. Why would you not be excited about that. Of course the supply isn’t… Read more »
Anonymous
JL
6 years 5 months ago
Gixxer, The “historic rise in supply” is in condos requiring incomes far greater than the median income of Miami-Dade. ie. the condos that are the very focus of this blog. Looking at historical housing data from overall Miami Dade where the median income is about $40-50K isn’t very relevant to the condo segment we talk about. There’s no doubt the $200+/sq ft Miami condo overbuild is historic. In other words, if you’re used to seeing 2 or 3 cranes in Back Bay Beantown putting up high-rise condos and then for 7 years straight you suddenly see 12 cranes putting up… Read more »
Anonymous
Joe
6 years 5 months ago
Gixxer 1000 said: “In that 8 year span housing grew by 144,883 units while the population grew by 126,804 people. Did they overbuild, yes. But by no means historical. More housing units were built during the early 70’s than were in the recent housing boom.” — Really? For every person who moved into Miami over the past decade, *1.2* homes were built. Unless a huge population of rich, single, childless people moved into Miami while I wasn’t looking, I’d say it was indeed a “historical” overbuild. —— Gixxer 1000 said: “You’re failure to understand simple mathematics is perplexing.” — But… Read more »
Anonymous
Elvis
6 years 5 months ago
no need to quote and bash each other. Gixer makes good points and so do many others. One thing I have learned is you can present any set of numbers and analyze them in any way which helps prove your point. I know that the condo supply has dwindled in the last year. For example in Met1 where I live about 9 months ago the developer started renting out units. At that time about 1/3 of the ~440 units were sold and now we have at least 300 units occupied. In addition there was a bulk sale of 80 units… Read more »
Anonymous
gables
6 years 5 months ago
Elvis, you make a valid point regarding the LLC’s. Look at the ownership list of many new condo buildings-an absurd number are owned by LLC’s. Many developers turned their remaining units over to LLC’s probably in an administrative move-the LLC names seem to indicate a link to the developer. These units will eventually come onto the market. Most likely at a loss, albeit over several years of somebody else carrying the cost. Joe is on the money regarding the transition of >$250k units into the under $250k unit range. While this may not explain all the changes, it certainly was… Read more »
Anonymous
6 years 5 months ago

Another story about the proposed Publix in the Arts District at 1776 Biscayne Blvd:

http://www.miamiherald.com/2010/04/27/1601412/plans-for-a-publix-boost-onetime.html

Anonymous
gables
6 years 5 months ago

Lucas, are your sales/rental listings updated daily on this site? Just curious whether we see real time or some delay in the listings. Thanks for the great web site!

Anonymous
Gixxer 1000
6 years 5 months ago
Joe, “Um, is this a joke? Do you really believe 21 months of supply in the $250,000 to $500,000 segment actually was SOLD in just 9 months, rather than simply being pushed down (via price decreases) into the $0 to $249,999 segment and/or shifted to the rental market?” Are people here really that ignorant. The term “supply” is relative. It changes each month depending on the number of houses you’re selling each month. If you have 1000 houses and your only selling 100 a month then you have 10 months of supply(1000/100 = 10). But if you start selling 200… Read more »
Anonymous
Joe
6 years 5 months ago
Gixxer 1000 said: “Are people here really that ignorant. The term “supply” is relative. It changes each month depending on the number of houses you’re selling each month.” — Nice try, but if supply is relative and nothing to get fired up about, then why did you say this less just 24 hours ago: “Look at the last time he posed numbers. If you look at the break out for just Miami and look at the $250k -$500k range which is where most downtown condos fall you can see that there was a 53.62 month supply. Now if you look… Read more »
Anonymous
Gixxer 1000
6 years 5 months ago
“So, yesterday, Gixxer 1000 asks, “Why would you not be excited about that?” but then, today, dissembles and claims people would have to be “ignorant” to not know it was mostly a paper improvement rather than a real-world improvement based on a huge uptick in actual sales. Shameless.” Are you really that clueless. There was a HUGE uptick in actual sales. I don’t see how you can’t understand this. I mean its not like someone is telling this to you. It’s typed in. You can read it multiple times, even slowly if you like. These condos increased their sales by… Read more »
Anonymous
Joe
6 years 5 months ago
Gixxer 1000 — You’re the living embodiment of how statistics don’t lie, but liars use statistics. For one thing, your “HUGE uptick in actual sales” was from 28 units per month to 40 units per month in the $250k to $500k price segment. That’s a grand total of 144 additional sales over a 12-month period. If you call that a “HUGE” sales number, for an allegedly upscale, luxury market like Miami, and with mortgage rates at historic lows (and every imaginable incentive under the sun available to buyers), you’re crazy. For another, you’re not even being honest enough to make… Read more »
Anonymous
miami2009
6 years 5 months ago

Anyone have any info on Terra Beachside on 60th and Collins? Tia!

Anonymous
george
6 years 5 months ago
RE miami 2009 Terra Beachside is really Terra Roadside as it is sandwiched between the noisy northbound and the southbound lanes of Collins Ave on a narrow piece of land . The floorplans looked quite decent and this had the potential to be a first rate project but in ANOTHER quieter location not smack in the middle of Collins ave. Can not understand what motivated the developer to buy and develop this awful unliveable site -maybe he polled a focus group of the hearing impaired when he did his due diligence but.. I suggest that if you purchase there ask… Read more »
Anonymous
BillP
6 years 5 months ago

Joe, he is an idiot- don’t bother

Anonymous
Gixxer 1000
6 years 5 months ago
I’ll continue to be the idiot that is right. We had this same discussion about supply at the end of January where I said there was between a 20 and 14 month supply of condos priced $500k and bellow. I ended the conversation with this: “Listen, I’m done. Let’s wait until Lucas puts an update out and then look at his numbers to see how many months of supply we currently have. You have stated that in December ‘09 (which I consider current since its only January) the supply of condos $500k and under is almost 36 months. I have… Read more »
Anonymous
6 years 5 months ago

Miami is like a physics.. thats it.lol

Anonymous
miami2009
6 years 5 months ago

Greoge, thanks for the review of Terra. I just visited the complex. Liked the floorplans and overall the architecture is quite nice. You are right about the location however.

Too bad…maybe for the right price.

Anonymous
6 years 5 months ago

Looks like price reductions at Everglades on the Bay may become a reality in the near future:
http://www.dailybusinessreview.com/news.html?news_id=62159

Anonymous
owneratinfinity
6 years 5 months ago
I was very disappointed when I saw Everglades on the Bay recently…. It looks likes it is not being maintained when I saw it. It looked like a 5-10 year old buiilding rather then a 2 year old building. Both buildings already look like they need a paint job and the pool area’s concrete decking needs a good stream cleaning and pool furnture looked worn out already. Many of the patios had sloppy stuff out on them showing that the developer is renting many of the 400 rental units to lowerclass peolpe. Due to how dirty the exterior of the… Read more »
Anonymous
Joe
6 years 5 months ago
Gixxer 1000 — Your post #38 might be the most dishonest post in the history of this site. I’ve been maintaining for a year now that almost all of the action in Miami is in the $0 to $250,000 segment, and NOTHING in Lucas’ updated numbers above disproves my point. Further, for you to claim there’s only a “14-month supply” of condos priced at $500,000 and below is BLATANTLY DISHONEST. Lucas’ chart plainly states that there’s a 26-MONTH supply of condos priced at $250,000 to $500,000. The only way you’re coming up with your magic “14-month” number is by disingenuously… Read more »
Anonymous
JL
6 years 5 months ago

Everglades has A LOT of units. Curious if they came on the market now, what would their pricepoint have to be to sell out?

Anonymous
Gixxer 1000
6 years 5 months ago
Joe, Again you are have no comprehension. You make it seem like when people buy condos they only look at the $0 – $250k segment or the $250 – $500 segment. Lucas just broke these segments out as a guide. But he could have just as easily made the segments $0 – $200, $200 – $400, $400 – $600 etc. Or he could have made them $0 – $150k, $150k – $300, etc. But regardless we were talking about ALL condos priced $500k and bellow. Here is your quote: Joe Wrote: “As of December 2009, there was almost a 3-year… Read more »
Anonymous
Gixxer 1000
6 years 5 months ago
“New High: 22,000 Residences Under Contract In South Florida” http://condovultures.com/home/5506–new-high-22000-residences-under-contract-in-south-florida.html “Nearly half – about 46 percent – of the current pending contracts are in Miami-Dade County, which is home to Aventura, Miami Beach, and Sunny Isles Beach. Condos and townhouses account for more than 5,800 pending deals while single-family houses represent an additional 4,500 contracts, according to the report.” As of 4/26/10 (4 days after Lucas’ numbers) they are showing 16,291 total condos available in Miami-Dade. At the same time they are showing 5,748 pending sales. And seeing that the tax credit is set to expire I’d guess there are… Read more »
Anonymous
scrivener
6 years 5 months ago
Joe, Gixx, et. al: BOYS! BOYS! BOYS! Don’t make me come back there and separate you! Can’t we all just get along? I think that what we need here are the facts. Is there available data on this “reverse bracket creep” – – meaning raw, cold, unflinching numbers concerning the number of condo units whose price began in range A but were shifted to range B or range C. Is there a report, chart, etc. showing, for example, that Unit 1000 in Development X was priced at $1.5 million in the first quarter of 2009 but was downgraded to $900k… Read more »
Anonymous
Cyrus
6 years 5 months ago

interesting article, stating miami had the highest # of foreclosures in the 1st qtr, year on year, compared to any other metro area city, filings up 71% in the qtr:

http://finance.yahoo.com/news/The-worsthit-metro-areas-for-cnnm-972652490.html?x=0

Anonymous
Drew
6 years 5 months ago

Big article in the Herald today about the $8,000 tax-credit expiration and the “mad rush” of buyers trying to sign contracts in order to qualify on time.

Funny thing is, if most of these buyers wait an extra 6 mos or a year for prices to continue their fall, the discounted sales price will easily eclipse the $8,000 they’ll receive on their 2011 tax return. No realtors are talking about that, though…..

Anonymous
Gixxer 1000
6 years 5 months ago

That’s weird because here are the foreclosure filling statistics for Miami-Dade county directly from the source:

http://www.miami-dadeclerk.com/dadecoc/Mortgage-Statics.asp

1st Quarter 2009
Jan 6,063
Feb 5,942
Mar 7,103

Total 19,108

1st Quarter 2010
Jan 4,128
Feb 4,880
Mar 3,244

Total 12,252

Year over year foreclosure fillings are down 36%.

Actual foreclosures were also down 33% in the first quarter for Miami-Dade.

http://sf.therealdeal.com/miami/articles/foreclosures-down-21-percent-in-first-quarter

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