Miami Condo Market’s Overbuilt Based in Numbers

A great conversation enfolded and I wanted to expand on that conversation with a post that will hopefully find its way to condo sellers throughout Miami. It has been reported that the July Brickell condo index that only 9 closed condo sales occurred from June 19, 2007 to July 18, 2007, in the 18 buildings that comprise the Brickell Condo Index, that was last year. A question was left for me in the comments section of the post about whether I felt that the lack of sales activity was a reflection of an overpriced condo market in Miami. Well it seems that all signs are pointing that way and may I say that it isn’t pretty.

However, sellers need to realize that their situation will become progressively worse as time goes by and more condo units come onto the market throughout the overdeveloped areas of Miami that stretch from Brickell to the Arts District. In a nutshell, yes, prices do need to come in significantly in order for buyers to be enticed to buy. There are a lot of the so called motivated condo sellers right now who have their units listed with a Realtor who are having a very difficult time selling their condo. Your condition can easily turn from say motivated to the blunt desperate within a six month time period and that is saying a lot.

So let us turn into the digits. Within the say next 7 months there will be five new condo developments that will be completed in Brickell. These five developments are:

· 500 Brickell (633 units)

· The Plaza on Brickell (1,000 units)

· Avenue (582 units)

· Brickell on the River 2 (322 units)

· Latitude on the River (455 units)

To sum it up these five condo developments will bring 2,992 new condo units to the Brickell condo market within 7 months. That is just 7 months with that amount of units. 12 months after that, another four developments will be completed in Brickell. These developments are:

· Infinity (459 units)

· Axis (718 units)

· Icon (1,816 units)

· Epic (966 units).

With that being said these four developments will add another 3,959 new condo units to the Brickell condo market. That is a total of 6,951 new condo units within 19 months. That number is big for development. Do I smell overbuilding? Well possibly. But we should consider the points of this. Over 6,900 new condo units within the next 19 months in Brickell, which means Brickell condo index is currently comprised of 18 condo buildings throughout Brickell which consists of a total of 5,348 condo units. This means that within 19 months we’ll see a 130% increase in the number of units that comprise the index. The total number of condo units represented in the Brickell condo index will increase from 5,348 condo units to 12,299 condo units within a 19 month period. That can either be good or bad, depending on what the market holds for the not so distant future.

Jron Magcale


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