Fun with Graphs (Lots and Lots of Them)

After punching up all these graphs, I was a little surprised to see where we’ve been in relationship to where we are now. In this post, I’ll review the inventory of available Miami Beach condos, as well as the average price per square foot (PPSF) and the luxury condo market over $2M.

Six-Year Snapshot of Miami Beach Condo Inventory: All Ranges

The graph above shows that the market peaked in 4/05, when the number of condos for sale was the lowest (911) and the number of condos sold was the highest (249). At that time, there were only 3.7 months of condo inventory available, which represents a strong sellers’ market. A real estate market is considered balanced when six to nine months of inventory is available.

Inventory peaked in 7/07, with almost 4,000 units on the market. The sales low-point was between late 2007 and early 2008, with only 70 units sold in 1/08. Currently, there are 2,751 condos for sale in Miami Beach.

Miami Beach Condos: Months of Inventory

Months of Inventory is used to indicate or assess how long it would take to sell all existing condos on the market, assuming the rate of sales stays constant and no new listings are added. Again, the market is considered balanced when six to nine months of inventory is available. In 1/08, there were 56 months of Miami Beach condo inventory available based on closed sales. Today, we are clearly still in a buyers’ market with 17.1 months of inventory available.

Miami Beach Condos:  Tracking Average Price per Square Foot

This graph is kind of boring. Not much can be gleaned from it in my opinion, but some people love it.  I don’t like it because it represents an average. Miami Beach condo inventory swings from one end of the spectrum to the other.

Say you are interested in buying a condo at Apogee South Beach and want to use this chart as a guide. Waste of time. It includes all condos, all price ranges and distressed sales (short sales and bank-owned real estate).

One interesting nugget of info seems to be that the average PPSF peaked in 4/08 at $679. Weird. Today, the average PPSF is $463, which puts us just about at the 4/05 price level ($464).

Average Price per Square Foot for a Miami Beach Condo:  Excluding Distressed Sales (bank-owned and short sales)

I know these numbers are spot-on because the average PPSF in 4/05 and 4/08 is the same in this chart as it is in the previous chart ($464 and $679 respectively). The effect of distressed sales begins to reveal itself in 1/09 through today. The current average PPSF (w/o non-distressed sales) is $659.  That is almost a $200 PPSF difference.  Moving right along to my favorite niche…

Luxury Miami Beach Condos: Six-Year Retrospective – $2M+

This chart is pretty self-explanatory. Inventory peaked in 1/09 with 228 Miami Beach condos for sale OVER $2,000,000. Currently, there are 162 units on the market at this price point. One note about this graph: Apogee and Continuum North were not built until 2008.

Average Price per Square Foot: Miami Beach Luxury Condos

Interesting to note here that the average PPSF for luxury Miami Beach condos peaked right around the same time as the under $2M condos. The numbers here are up and down, but the average PPSF is currently at $1,138 in the luxury sector. The numbers are elevated because a few high-priced condos at Setai, One Bal Harbour and Fontainebleau II closed in the last month or so.

Miami Beach Luxury Condos: Months of Inventory

Eeeh. Some sharp peaks, but overall it looks as though things are headed in the right direction for the $2M+ condo market.  Currently, there are 24 months of inventory at the high end, and clearly that’s not good, but all the really good, prime units in A+ buildings are sold. I think the luxury condo market bottomed out last summer. Deals, really good ones, on really good apartments, have been had. Those days, my friends, are gone.

Before I wrap this all up, I found one more chart that is really eye-opening to me. Probably the best one of them all:

Miami Beach Distressed Condo Sales Statistics: Under $500k

• 2,751 condos on the market in Miami Beach
• 640 or 23.3% are distressed sales
• 585 of the 640 are under $500k (see chart above)

Well, Kevin, What’s Going to Happen Here?

Since my crystal ball, along with everyone else’s Mercedes, is in the shop…

I think that for Miami Beach, clearly, the worst is over. The market has bifurcated. It’s either you are over or under $500k. Period. But, now more than ever, real estate fundamentals, along with your objectives, should be the things that guide you most as you meander through the real estate landscape. Obviously, the best units in the best buildings in the best locations are no-brainers. If you are looking in the under $500k range, there are still going to be some good buys for the foreseeable future. As you can see in the chart above, the inventory of distressed properties is still coming to market at a fairly steady rate, and I don’t see any signs of that inventory drying up anytime soon.

Related Reading

• Miami Beach Real Estate Statistics:  Distressed Properties & Diana Olick

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This is the lobby for the condominium of One Bal Harbour.  It is very traditional.

Here we have the oceanfront social room.  The room resonates with sophistication.

One Bal Harbour offers a theater for building residents which is equipped with surround sound.

An elegant bar within the oceanfront social room.

Oceanfront pool for residents of One Bal Harbour.

One Bal Harbour’s location is arguably one of the two best locations in Miami, at 10295 Collins Avenue in Bal Harbour, Florida.  The condominium has 185 residences and is combined with a five-star-quality Regent Bal Harbour condo-hotel which has 124 units. 

This is a great example of why One Bal Harbour’s location is considered so priveleged.  The north side of the building overlooks the Haulover Inlet which provides breathtaking, expansive and unobstructed northern views. By the way, this photo WAS NOT provided by the developer and is not a rendering.  I took this photo from the 25^th floor of the condominium.

The developer of One Bal Harbour Condominium and The Regent Bal Harbour condo-hotel is WCI Communities.

One Bal Harbour provides the amenities of a 5–star hotel to its owners including fine dining and a 10,000 s.f. world-class spa managed by the famous L’ Institut de Guerlain Paris offering massage, skin treatments, hand and foot therapies as well as nutritional and anti-aging treatments (woo hoo!). 

For more information on One Bal Harbour Condominiums click here

One Bal Harbour, Miami Condos, Miami Beach real estate, Miami Beach condos

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This month I have started to feel that Miami Beach condo sellers are coming to terms with the reality of the “new” market. The impending wave of new condos “across the bridge” will no doubt bring down the market as a whole. Don’t worry, the best properties in the best locations are the LAST to go down and the FIRST to come up!

Three new luxury buildings will be added to the Miami Beach real estate mix: Continuum II, Apogee South Beach and Canyon Ranch Living Miami Beach. It will be interesting to see how many speculators place their units on the market at Continuum II.  Since Apogee South Beach has so few units (67), I think that any inventory that comes to market will be quickly absorbed.

So….You Want to Buy a Condo in South Beach?—What to Do

Always be guided by your gut instinct. Never let anyone talk you into something that you don’t feel is quite right. Even in this wobbly market, I would have NO problem buying a unit a Continuum, NONE! Here’s why: Location and supply and demand.

Kevin’s Recommendations

Continuum I. I believe it is actually a steal. Yup, UNDER-PRICED!

Apogee South Beach. This building is very pricey but will no doubt become the most prestigious condominium in ALL of South Florida. To be delivered later this year.

Canyon Ranch Living Miami Beach. One of the only projects along with Setai South Beach that is actually a destination.

One Bal Harbour. Arguably one of the two best locations in all of South Florida.

ICON South Beach. This one is all about timing. There is a lot of inventory on the market and not many condo sales. The owners that need to sell will be in reality VERY SOON.

Miami Beach Real Estate Condo Buying Tips:

• East and Southeast exposures are the most desired. If the condominium is on the bay, then the Southwest exposure would be the preferred exposure.
• Two bedroom units are better than three bedroom units (larger pool of buyers)
• If you can find a luxury condo on the ocean with one bedroom units with eastern exposure, those are rare. Continuum II has some and so does Canyon Ranch Living. They are gold. Developers typically give the larger units the preferred east exposure.
• Never buy a “flow-through” unit without seeing it or taking a tour of others. Some people like them—some people don’t.
• Corner “flow-through” units (three exposures) are rare. Apogee has them and so does Canyon Ranch Living. Great on paper, GREATER in reality.

Miami Beach Condos, Miami Beach real estate, One Bal Harbour, South Beach real estate, South Beach condos, Continuum II South Beach, Canyon Ranch Living Miami Beach

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