Miami Condo Index – Brickell Key – October 2007

October 31, 2007

The following statistics were collected on October 27, 2007 but I wasn’t able to compile and publish the numbers until today.

Each month since I began this index, the average price per square foot of condos listed in Brickell Key have gone down slightly when compared to the prior month. This month is no different. The average price per square foot of the ten condos, which represent the Brickell Key Condo Index, fell to $501.55 this month from last month’s figure of $505.30. The weight-adjusted average also fell to $497.82 per square foot versus last month’s weight-adjusted average of $501.64.

• Brickell Key One – 520 Brickell Key Drive | 33131 | $399.82
• Brickell Key Two – 540 Brickell Key Drive | 33131 | $468.35
• Carbonell – 901 Brickell Key Drive | 33131 | $573.53
• Courts Brickell Key – 801 Brickell Key Drive | 33131 | $467.70
• Courvoisier Courts – 701 Brickell Key Drive | 33131 | $468.91
• Isola – 770 Claughton Island Drive | 33131 | $524.93
• One Tequesta Point – 888 Brickell Key Drive | 33131 | $471.25
• St. Louis – 800 Claughton Island Drive | 33131 | $498.53
• Three Tequesta Point – 848 Brickell Key Drive | 33131 | $545.61
• Two Tequesta Point – 808 Brickell Key Drive | 33131 | $596.89

The average price per square foot of condos sold over the previous six months has also continually gone down each month since I began this index. The average price per square foot of condos sold within the last six months dropped to $430.08 from last month’s average of $432.94. The weight-adjusted average also fell to $424.57 from last month’s weight-adjusted average of $428.59.

• Brickell Key One – 520 Brickell Key Drive | 33131 | $310.76
• Brickell Key Two – 540 Brickell Key Drive | 33131 | $375.00
• Carbonell – 901 Brickell Key Drive | 33131 | $517.32
• Courts Brickell Key – 801 Brickell Key Drive | 33131 | $435.03
• Courvoisier Courts – 701 Brickell Key Drive | 33131 | $424.63
• Isola – 770 Claughton Island Drive | 33131 | $437.40
• One Tequesta Point – 888 Brickell Key Drive | 33131 | $413.07
• St. Louis – 800 Claughton Island Drive | 33131 | $451.18
• Three Tequesta Point – 848 Brickell Key Drive | 33131 | $479.76
• Two Tequesta Point – 808 Brickell Key Drive | 33131 | $456.63

As with October’s Brickell Condo Index, I’ve provided the following snapshot to make it easier for everyone to make sense of the statistics above.

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. As you can see, each development has an average six month sales price that is well below the list price that is prevalent in the market at each condo building in Brickell Key.

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. 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 ten developments in the Brickell Key Condo Index, only Courvoisier Courts falls into this territory with 24.26 percent of the building currently on the market.

The fourth column shows the number of pending sales while the fifth column displays the number of closed sales since September’s Brickell Key Condo Index. As you can see, there are 16 pending sales in Brickell Key. The 7 pending sales at Carbonell and 3 at Isola may help to prevent each from penetrating the dangerous 20 percent mark next month. There’s been a total of 2 closed sales since last month’s statistics were presented. September revealed 3 closed sales while 4 transactions closed over the previous month in August. Hopefully, next month won’t reveal the lonely number of 1 or even 0. The One and Three Tequesta Point sisters brought their A-game this past month to prevent a goose egg from appearing in this month’s closed sales figure.

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 while those highlighted in green show those that had an increase. One Tequesta Point was the only development that was able to muster an up-tick in prices for condos listed.

The seventh column reveals the difference in average sales prices from this and last month’s, expressed as a percentage. The cells displayed in green show those which had an increase, the one in yellow reveals an unchanged condition while those in red reveal a decrease. You may notice that I colored St. Louis in green although it shows 0.00 percent. The average price per square foot of condos sold at St. Louis over the past six months actually inched up 2 cents per square foot. Carbonell and Two Tequesta Point were the only other two to increase. The rest of the bunch fell.

For months, I’ve been saying that Brickell Key is the best indicator that we have of the Miami condo market. Each month, list and sales prices in Brickell Key have come down steadily, as they should be. It’s almost as if we can count on it to provide a true picture.

I have a prediction, however. Take it for what you will because this is just my prediction. The Brickell Key Condo Index will continue on its steady decline. Most of the developments located on Brickell Key were completed prior to 2004, so speculative money in Miami, for the most part, doesn’t reside there. Brickell Key also enjoys a very small percentage of foreclosures and short-sales.

Brickell, however, with its high number of foreclosures and short-sales, prevalent mortgage fraud and large number of new condos coming onto the market will be much faster to correct itself. It won’t have a steady decline. It will crash beyond Brickell Key statistics but then rise at a much higher rate than condo developments in Brickell Key. I think Plaza on Brickell will act as a buoy. I’m not saying that prices at Plaza on Brickell won’t dip lower after closings. I’m just saying that as prices at Plaza on Brickell fall, so will other prices in Brickell but prices at Plaza will act as a floor.

The following graph displays what I have in mind. The line at the top, towards the beginning of the graph, represents Brickell, while the one below it represents Brickell Key. Sorry for the amateurish work but I still need to go trick-or-treating tonight.

It’s not exactly what I have in mind but it gives you an idea. I don’t think the average price per square foot of Brickell condo developments will rise at such a rapid pace as which is indicated by the final portion of the drawing above but I do think that it will fall below, then rise back above that of Brickell Key. The developments in Brickell will, for the most part, be much newer and will draw heavier demand. New speculative money already has their eye on Brickell. Brickell Key will bounce once buyers for Brickell condos flood the market and those who are left behind will look towards Brickell Key. Brickell Key should, in my opinion, sell above Brickell, but I think the world-renowned attention to Brickell, and its oversupply problem, will draw a level of demand that inverts the situation.

What do you all think? Does this make sense or am I out of my mind?