South Beach Real Estate Shock and Awe: SoFi Luxury Condo Sales Up 41.9% Over 2007

In my last post on real estate statistics for Miami Beach condos in South Beach, A LOT was revealed by comparing 2007 to 2008 data for condos in the South of 5th / SoFi neighborhood. And now, here’s more information from the Southeast Florida Regional MLS that indicates this area has performed amazingly, especially considering the market.

In the stats below, you’ll notice two sets of numbers for 2008. The first set shows the year-over-year increase in sales and condo transactions for the same eight SoFi properties. The second set reflects the addition of two buildings opened in 2008 (Continuum North and Apogee South Beach) that weren’t part of the 07 South Beach-South of 5th condo index. That index is now comprised of ten luxury, waterfront high-rises.

I believe that, even without the two new buildings, a high percentage of 2008 buyers would likely have purchased a condo in one of the other SoFi buildings. With this in mind, I consider the second set of stats a truer reflection of the overall activity last year in this South Beach neighborhood.

2007-2008 Sales Volume for South Beach-SoFi Condos

  • 2007: $171,743,350 – eight South of 5th condos
  • 2008: $177,844,388 – same eight condos / 3.6% increase
  • 2008: $243,668,138 – two new condos makes ten / 41.9% increase

2007-2008 Number of Transactions for South Beach-SoFi Condos

  • 2007: 106 – eight South of 5th condos
  • 2008: 131 – same eight condos / 23.6% increase
  • 2008: 153 – ten condos / 44.3% increase

The increase in sales and number of units sold for the same eight South of 5th condos is surprising. But with the addition of Continuum North and Apogee South Beach, the respective 41.9% and 44.3% leap in total SoFi real estate activity is a big shock, at least to me.

2007-2008 Average Price Per Unit for a South Beach-SoFi Condo

  • 2007: $1,620,000
  • 2008: $1,582,261 / 2.3% decrease

It isn’t a surprise that the average price per unit or dollar per square foot went down, but the fact that it decreased 2.3% could stun many – even some local agents. Miami Beach real estate has suffered like every other market, but South Beach’s SoFi neighborhood has weathered the storm handily. I’m unsure, though, about what may be on the horizon as the current supply clearly outweighs the demand.

SoFi’s success has not been random, but to avoid fueling the high winds of the low economy, it’s better to stick to facts than emotions.

  • ja

    Kevin, great analysis. However, you left out half the picture – the supply side of the equation. How has inventory been in the area?

    Just because sales are up doesn’t mean great news, especially if inventory is up by a much greater %.

    Again, that is why I think you should present the data on absorption rates and how they have changed from 2007 to present. It captures both supply and demand.

    And once you look at that #, I think things look pretty grim.

  • http://www.kevintomlinson.com Kevin Tomlinson

    JA,
    Hey! Welcome back. Just for you I will do an absorption rate post, ok?

    But as mentioned from our last comment stream, my posts tend to focus on what has already happened not what will happen.

    Ok?

  • http://www.kevintomlinson.com Kevin Tomlinson

    JA,
    I’ve been thinking and analyzing your comment. I do agree with you–things are grim. They will get undoubtedly get worse.

    I always trust my gut and it’s never failed me yet. I’m feeling that we will be nearing the bottom soon, in the next six or so months. Why? Because the BEST neighborhoods are the last to go down AND the first to come up.

    I have another post to come out in the next day or so on another Miami Beach sub-market, but right after that I am going to do a post comparing last January’s activity to this January’s activity. It’s not gonna be puuuuurty.

  • http://realgreentrends.com Adriana Faerman

    Kevin, very useful and exciting information. I understand that absorption rates were left out of the picture, but the fact that the average price per sq.ft went down as low as 2.3% is good news. Also, I believe that your market is weathering this storm with high scores as compared with Sunny Isles and Aventura. I am handling a lot of foreclosures and some short sales in the $150,000 to $400,000 price range and the inventory keep increasing although there have been bids for some units that surpassed their asking price. Interesting, isn’t it?
    Kevin, great blog!, as usual coming from an expert like you.

  • http://www.oxfordtopagent.com Oxford Homes For Sale

    Congrats on having a market that is increasing! I am sure the economy will turn around for the rest of us as well! It’s all a mindset! I agree with you that it is better to stick with facts rather than emotions.

  • http://www.kevintomlinson.com Kevin Tomlinson

    Oxford Homes,
    Thanks, but I don’t think 2009 will offer what the previous years have.

    Even though Miami real estate and condos have taken a huge beating in the press, South Beach has not really been affected, until now.

  • http://www.lvrealty.net Charles

    The main thing is that people are buying property again. We’re seeing the same thing in the Vegas market. The influx of foreclosures have depressed prices down to levels where some buyers have been priced out in the past.

  • ja

    I think Kevin is dead on. Sofi has performed amazingly through the RE downturn (relative to the rest of Florida). But 2009 will certainly not hold the same as previous years.

    Already I’m seeing huge price cuts here and there on higher end buildings. And not just mere price cuts from overpriced levels, but ones that if sold even close to asking would suggest anywhere from a 10-20% drop from last year’s sales prices of comparable units.

    That’s what happens when you have a 2-3 yr backlog of inventory and not enough demand. The few who actually need to sell and aren’t just “testing the waters” are forced to give big discounts to make their units more appealing.

  • sofi fan

    hello, what was the price per sq. ft. average for 2008 ? how do you see new product coming up, like the high end stuff next to Prime 112, particularly South of Fifth. do these buildings have financing to finish ? when would you look into them ? after 50% close or wait for higher closings but risking losing out on good apartments. Is there value in these new SoFi projects ? thanks

  • http://luxurycondosnow.com Graham Gordon

    How has the market in South Beach been lately? I’ve heard there has been steady sales at incredible prices. I may have a post on Miami in the upcoming days as well.