Marina Blue Market Update – 2011 to Present

January 24, 2013

Below is a market update that I emailed to Marina Blue condo owners late last week.  While not everyone reading this will have an interest in Marina Blue, I think a similar upswing in prices and lack of inventory as described below holds true for most major condo developments throughout Greater Downtown Miami.

If you haven’t heard, the real estate market in Miami is once again heating up and prices for condos at Marina Blue are following suit. Demand is high and inventory is low, paving the way for a strong 2013. Just how strong you might ask? I decided to crunch some numbers to help answer that question.

The left-hand side of the chart below graphically illustrates various statistics regarding asking prices in 2011 (blue), 2012 (red) and 2013 (green). There haven’t been any closed sales thus far this year so the right-hand side of the chart illustrates only sales that took place in 2011 (blue) and 2012 (red). It should be noted, however, that currently there are 4 pending sales at Marina Blue.

In 2011, there were a total of 33 closed transactions which sold at an average price of $324,806, or $299 per square foot. In 2012, the number of closed sales increased 73% to 57 and sold at an average price of $378,495, or $329 per square foot. Due to outlying sales that skew the averages, the median sales price can sometimes provide a better sense for the overall market but that is not the case with this data set. The average and median figures for each year are relatively in line with each other. The average sales price increased 16.5% from 2011 to 2012 while the average price per square foot increased only 10%. This indicates that a greater percentage of larger units sold in 2012 than in 2011.

That brings us to the present day. As of January 14, 2013, there were 29 condos available for sale at Marina Blue. These units ranged in price from $355,000 to $2.8M. The average list price is skewed dramatically, however, due to one listing that is way off base. In this case, the median list price of $515,000 provides better insight into the overall market than the average list price of $698,793.

The chart below follows the same format as the chart above but breaks everything down on a price per square foot basis.

When comparing current availability with closed sales in 2012, it should be immediately clear that current asking prices are very high relative to where condos have sold in 2012. The median sales price per square foot in 2012 was $326 while the median asking price per square foot is currently $452. That is a huge gap but presents a big opportunity for someone who is looking to sell fairly quickly at an above average market price. To be clear, I feel that the average unit will now get $370-$380 per square foot. That is a very healthy premium when comparing it to the median sales price per square foot in 2012. Obviously, units on high floors with above average build-outs should fetch even more.

As inventory dwindles, I have noticed that more and more condo owners throughout Miami are starting to raise their asking prices.  For example, of the 62 units currently available for sale at 900 Biscayne Bay, 13 of the owners have decided to increase their offering price since initially hitting the market.  At Ten Museum Park, 6 of the available 22 units are now offered at a higher price than was available just months ago.  A similar trend can be seen at plenty of other major condo developments throughout Miami as well.  Sellers are taking advantage of the low inventory and are adjusting their offering prices accordingly.