Miami & Miami Beach Condo Trends – April 2010
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:
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.):
The following statistics encompass only those condos located throughout Miami Beach:
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.
Miami & Miami Beach Condo Trends – July 2009
I collected the following figures last Thursday night on July 23, 2009. It has been about six months since I last published inventory numbers for condos in Miami-Dade County. The last Miami & Miami Beach Condo Trends post was published on January 19, 2009.
As many of you read earlier today, the Case-Shiller price index rose on a month-to-month basis for the first time in 3 years. 13 of the 20 cities in the index showed month-over-month price gains in May when compared with April 2009. However, Miami was not one of the 13 cities to show an improvement in prices. Home prices in Miami saw a decrease of .8 percent during that period.
There may not have been an increase in home prices in Miami but the figures below show a major improvement in the number of closed condo sales in the previous six months when compared to the closed condo sales in the six months prior to January 2009. For example, there were 3,551 closed condo sales in the six months leading up to January 2009 compared to the 5,007 closed condo sales that occurred within the past six months. That’s an increase of 41 percent. The number of closed condo sales in Miami improved approximately 39 percent while closed condo sales in Miami Beach increased about 20 percent. As a result, the condo supply numbers for each showed considerable improvements as well.
View the entire workbook for this month’s Miami & Miami Beach Condo Trends. The various spreadsheets and graphs are found at the bottom.
Below, you will find the Miami-Dade County condo inventory and supply figures for July 2009:
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.):
The following statistics encompass only those condos located throughout Miami Beach:
This has been a very atypical year for real estate sales in South Florida. In most years, the vast majority of closed condo sales occur in the Winter months when snowbirds flock to Florida to shop for a vacation home to escape the dreaded cold. However, this past Winter season was unusually slow due to a number of reasons such as the paralyzing fear in the economy and a lack of financing. After the first 3 months of the year, I personally felt that 2009 was shaping up to be my worst year in real estate. However, at the beginning of April, business began to show life again. In fact, activity has drastically improved to the point where 2009 could end up being one of my best years. I personally feel that the Miami condo market is within 2-3 months of reaching the bottom. That’s in no way saying that prices will begin to increase soon after. The overall market needs to move sideways for at least the next 12-24 months before we see any significant increase in sales prices.
Miami & Miami Beach Condo Trends – January 2009
I decided to once again publish the condo inventory and months of supply figures for Miami, Miami Beach and Miami-Dade County as a whole. You’ll notice, however, a few changes to this update. One, you’ll now find viewable spreadsheets. This will make it easier to view the figures without needing to squint your eyes. Click on the View Full Spreadsheet link below each to view it in its entirety. Two, I’ve added pie charts to provide a quick picture as to which price range the condo inventory and closed sales reside. For some reason, however, Google Docs did not allow me to add percentage labels. Three, I calculated the months and years of supply figures using an average of six months worth of closed condo sales.
Below, you will find the Miami-Dade County condo inventory and supply figures for January 2008:
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.):
The following statistics encompass only those condos located throughout Miami Beach:
I hadn’t previously used a 6 month average to calculate the months and years of supply figures so it’s pretty meaningless to compare this month’s update to previous ones. However, here is the last update published in October 2008 if you’d like to compare the raw numbers.
Miami & Miami Beach Condo Trends – October 2008
Below, you will find the Miami-Dade County condo inventory and months of supply figures for October 2008. The first box to the left reveals the total number of condos that are currently available for sale on the MLS throughout Miami-Dade County. The second box discloses the total number of closed sales that occurred in the month of September 2008. The third and fourth boxes show the months and years of condo supply in Miami-Dade County. As you can see, the figures are also subdivided into various price ranges to reveal which part of the condo market has been most affected. The % change box will show you how the inventory levels have changed since my last update in May 2008.
The overall supply of condos listed in the MLS in Miami-Dade County has dropped from 25,461 to 24,788 since May 2008. On the flip side, the number of closed sales in the previous month has gone up from 474 to 527 creating a 12.51 percent drop in the years of inventory in Miami-Dade County since the last update. It’s once again surprising that inventory levels have dropped despite the thousands of new condos that have been completed and delivered in 2008.
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.):
The supply of condos in the MLS in Miami has dropped from 10,281 to 9,903 since May 2008. The number of closed sales in the previous month has gone up from 161 to 192 creating a 19.21 percent drop in years of inventory in Miami since the last update. As you can see, a large portion of these closed sales occurred in the $0-$249,999 price range. The inventory levels of the $500,000+ categories, however, have increased.
The following statistics encompass only those condos located throughout Miami Beach:
The supply of condos in the MLS in Miami Beach has dropped from 4,109 to 3,949 since May 2008. However, the number of closed sales in the previous month has also dropped from 113 to 98 creating a 10.82 percent increase in years of inventory for condos in Miami Beach since the last update. In fact, with the exception of the $500,000-$999,999 price range, the years of inventory has risen for each category.
Miami & Miami Beach Condo Trends – May 2008
Earlier this afternoon, someone left a link in the comments area of a previous post to a Florida Association of Realtors article that reveals an improvement in real estate inventory levels for the state of Florida in the first quarter of 2008. I wanted to see how the Miami and Miami Beach condo markets fared in comparison, so I decided to provide new supply figures for May 2008. My last Miami & Miami Beach Condo Trends report was published in February 2008.
Below, you will find the Miami-Dade County condo inventory and months of supply figures for May 2008. The first box to the left reveals the total number of condos that are currently available for sale on the MLS throughout Miami-Dade County. The second box discloses the total number of closed sales that occurred in the month of April 2008. The third and fourth boxes show the months and years of condo supply in Miami-Dade County. As you can see, the figures are also subdivided into various price ranges to reveal which part of the condo market has been most affected.
(Note: If you’re over the age of 40, you may want to have someone younger read the numbers below aloud to you. Either that, or bust out a magnifying glass.)
I was shocked to see that the months and years of supply figure had gone down significantly since my February update. The number of available condos has fallen slightly since February but the number of sold condos in the previous month has gone up about 41 percent. That’s a huge increase in sales activity. I was puzzled that the number of condos on the market actually fell. We’ve seen a lot of new condo buildings begin closings since the beginning of the year. I would have expected the number of available condos on the market to be much higher than in February.
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.):
The number of available condos on the market went up slightly since February but again the number of closed sales within the previous month showed a proportionately much larger increase. Miami condos experienced around a 44 percent increase in closed sales when compared to the figures presented in February. Miami now has a 5.32 year supply of condos. The $250,000-$499,000 price range has the highest supply at 8.16 years while the $1,000,000-$2,499,9999 is sitting on only 2 years worth of supply.
The following statistics encompass only those condos located throughout Miami Beach:
There’s been a decrease in the number of available condos in Miami Beach since February and about a 57 percent increase in closed condo sales. Miami Beach is now sitting on 3.03 years worth of condos. The $500,000-$999,999 price range has the highest supply of condos at 3.57 years while the $1,000,000-$2,499,999 price range is the healthiest at 2.32 years worth of condos.
What does everyone make of these figures? There’s definitely been an increase in the number of closed condo sales since February. I don’t think anyone can dispute that. However, what is happening to all the new condos that have hit the market since February? I expected sales activity to have picked up because of declining values and better opportunities than were available in February but I also expected to see a much higher number of available condos on the market. Are most of these condos being rented or is it too early to see an impact from the newly constructed condos because developers, for the most part, don’t list there unclosed condos on the MLS?
Miami & Miami Beach Condo Trends – February 2008
Below, you will find the Miami-Dade County condo inventory and months of supply figures for February 2008. The first box to the left reveals the total number of condos that are currently available for sale on the MLS throughout Miami-Dade County. The second box discloses the total number of closed sales that occurred in the month of January 2008. The third and fourth boxes show the months and years of condo supply in Miami-Dade County. As you can see, the figures are also subdivided into various price ranges to reveal which part of the condo market has been affected the most.
Since the January 2008 update, the overall condo supply in Miami-Dade County has increased about 10.3 percent. Most the increase, however, was due to a 25.1 percent increase in the $0-$249,999 price range, where about 41 percent of the overall condo inventory resides. The $250,000-$499,999 and $500,000-$999,999 price ranges had slight increases of 4.5 percent and 2.8 percent, respectively. The $1,000,000-$2,499,999 price range had a big drop of 25.6 percent and the $2,500,000-$4,999,999 price range had an even bigger drop of 39.8 percent in its condo supply.
As many would expect, the lower part of the market is experiencing the most problems, mainly due to it now being much more difficult to obtain financing for those looking to buy in this segment of the market. Those in the market to buy a condo for over $1M, oftentimes, can do so without any financing whatsoever.
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 has continued its upward climb in condo supply this month with a 24.3 percent increase since last month. Again, we see that the lower and upper parts of the market have performed quite dissimilarly. The condo supply in the $0-$249,999 price range has increased 20.6 percent while the $250,000-$499,999 price range has gone up a shocking 62 percent. On the flip-side, the condo supply in the $500,000-$999,999 price range has gone down 26.7 percent and the $1,000,000-$2,499,999 has dropped almost 50 percent.
The following statistics encompass only those condos located throughout Miami Beach:
Overall, Miami Beach experienced a 19 percent drop in its condo supply levels since last month. I was a bit surprised but I probably shouldn’t be. Miami Beach did not come close to experiencing the level of development that we recently saw in Miami. Foreign and out-of-state buyers are also much more likely to buy a condo in Miami Beach than they are somewhere in Miami. I think we will continue to see a widening gap between the Miami and Miami Beach condo supply figures in the months ahead.
Miami & Miami Beach Condo Trends – January 2008
In the last update of the Miami & Miami Beach Condo Trends in November 2007, I promised that the Miami and Miami Beach Condo Trends would be a monthly update. I hate breaking promises but December turned out to be much busier for me than I had expected. With the holidays on top of everything, it was a promise that I had to break.
I also mentioned the inclusion of a condo rental index. I still plan to include these stats within the next couple of months.
Below, you will find the January figures. The first box to the left shows the total number of condos that are currently available for sale on the MLS in Miami-Dade County. These include condos located in Miami, Miami Beach, Aventura, Homestead, Kendall, Coral Gables, Coconut Grove, etc. Keep in mind that these numbers do not include single family homes, just condos, townhomes and lofts. What surprised me is that the total number of listed condos has gone down since the November report. It dropped about 2 percent. However, the number of closed sales in the previous month fell sharply, down about 22 percent. The current condo inventory now represents 5.72 years of supply. That is roughly a 20 percent increase over the November figure. Thousands of new condos are ready to be delivered within the coming months, so we should see subsequent increases in upcoming months. Most of this increase will be throughout Miami, as opposed to Miami Beach or other areas of Miami-Dade County. You’ll notice that the figures are also broken down by price range to give you a better idea of which part of the condo market has been affected the most.
Below you’ll find the same statistics but these only encompass condos located in Miami. In November, the existing condo inventory represented 4.04 years of supply. Now, just two months later, we’re sitting on 6.01 years of condo supply. This represents approximately a whopping 49 percent increase! This is mainly attributed to a large drop-off in closed sales in the previous month.
The following statistics encompass condos located throughout Miami Beach. The increase of inventory in Miami Beach isn’t so startling. Miami Beach now has 6.15 years of condo supply compared to the 5.89 years of condo supply that we saw in November. This represents an increase of about 4.5 percent. There were only 3 fewer sales in December compared with the number of closed condos in October.
The inventory levels, as of right now, for condos located in Miami and Miami Beach are relatively close. I think by next month you’ll see Miami pulling ahead. What’s your prediction for the inventory levels that we’ll see for Miami condos in July 2008?
Miami & Miami Beach Condo Trends – November 2007
I’m going to start including a monthly condo trends report. My hope is that it will help to shed more light on the current state of the market. It is likely to be my most followed monthly piece. After the new year it, along with some other newly added statistics such as a rental market index, will become “premium” content. Just wanted to give you all the heads up. I just finished compiling the numbers and I was pretty shocked.
I basically wanted to find out how many months of inventory we have in Miami and Miami Beach. I created a report for Miami-Dade County, one for Miami and one for Miami Beach. I broke each report down to various price ranges to figure out which category has been affected the most. I took closed sales for the month of October and compared it to the inventory that is now available. Below you will find the numbers for Miami-Dade County:
As you can see Miami-Dade County has about 55 months, or 4.58 years, worth of inventory. I wanted to see how much of this supply resides in Miami compared to Miami Beach. Below you will find the numbers for Miami:
Miami currently has a 48 1/2 month, or approximately a 4 year, supply of condos. That’s actually much lower than I expected. However, keep in mind that there are thousands of condos that will come onto the market within the next 24 months. In fact, in July, I calculated that a little over 16,000 condos would hit the market within the next 19 months in the neighborhoods of Brickell Key, Brickell, Downtown Miami, Park West and the Performing Arts District. Probably about 1,500 or so units have hit the market since I wrote that post. If you add 14,500 units to the Miami figures above then we’re looking at close to a 10 year supply. Now that’s quite shocking!!!
Let’s take a look at the Miami Beach figures:
I was surprised to learn that the supply of Miami Beach condos is higher than that of Miami’s. The number of new condos coming onto the market, however, in Miami Beach pales in comparison to the new condos scheduled to hit the market within the next two years. My guess is that about 1,500 units will hit the Miami Beach market in that time which would put it at around an 8 year supply. Still pretty shocking given that it’s Miami Beach! I was equally shocked by the low number of closings in the $500,000-$999,999 price range. That appears to be a problematic price range if you’re a condo owner looking to sell somewhere in that range.
Despite a number of news stories that have hit the press lately, it looks like the ultra-luxury ($2.5M+) market isn’t moving. It has very few available listings compared to the other categories but it had basically no closed sales in October. There were a total of two in all of Dade-County. Both were located in Bal Harbour.
I receive a lot of monthly phone calls from investors who are waiting for the market to bottom-out. They all want to know when is the “right” time to buy into the South Florida condo market. I’m hoping that a report like the one above can help me pinpoint when that time might be.
A recent Fortune magazine article entitled, “Real Estate: Buy, Sell, or Hold?”, said the following:
The combination of steep discounts to move inventory and a stream of new communities built at a lower cost will keep prices far below their peak levels in the boom towns. And they’ll keep falling until builders work off the massive inventories. The tumbling prices of new homes, in turn, will put enormous pressure on the far bigger existing-home market, already under stress from two desperate groups of sellers, investors and banks. Hence, the adjustment needed to bring the ratio of prices to rents into alignment will happen far faster than in most housing downturns. “In the most vulnerable places in California and Florida, it’s highly possible that most of the correction will happen by the end of 2008,” says (Mark) Zandi, (chief economist at Moody’s Economy.com).
The article was mainly discussing single-family homes but I think the same holds true for the condo market. The Miami condo market is likely to drop lower, on a percentage basis, than other major U.S. cities but I agree with Mark Zandi that the market here will be quicker to correct itself because of the high number of foreclosures and defaults that we are likely to see. 2008 will be a time of readjustment. I’m looking quite forward to it.
