Catherine Rodstein Blog   Real Estate Blog

The current pre-construction boom began in 2011. There are nearly 35,000 new units planned for Miami - Dade, Broward, and Palm Beach Counties east of I95. Miami Dade accounts for approximately 70%. According to the Real Deal, Developers have sold 10,150 new condo units, 29% of the available inventory. Approximately 40% of the proposed condo inventory has yet to launch pre-sales. Today's predominantly foreign cash Buyers commit to higher deposits averaging up to 50% versus the previous 2004-2008 condo boom where Buyers typically put down 10-20%.

Statistics show that many of the New Development projects are experiencing very successful sales. Over 20 new condo towers including Faena House, SLS Brickell, and One Ocean have sold out. Close to 100 have sold well over 50% including Brickell City Centre's Reach, Porsche Design Tower, and Miami Beach Edition. High taxes, economic uncertainty, and Miami's sunny allure attracted the worlds wealthy, finding the higher prices reasonable to low versus their global capitals. Not to mention the attention to detail, design, and lavish comforts the new developments exude. Moving forward, are there enough well capitalized Buyers to buy up the remaining 25,000 units with 40-50% down? The second quarter of 2014 has seen a slowdown of sales raising some concerns. June condo sales fell 3% from May, down 3.8% from the previous year, according to the Miami Association of Realtors. Fortunately the high deposits finance the construction unlike the previous boom that resulted in a depression. Real Estate values, however, are affected by supply and demand. Although most of the ultra high end condos will be kept for the owners private use, the overage of inventory and high number of renters could potentially see rental rates fall prompting further investor slowdown.

 
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