The Real Deal Miami

Construction deals hit slow patch in March

Drop-off surprising given surge in business in the first quarter of the year

April 28, 2014 03:00PM

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Construction is rising in South FloridaThe value of all South Florida construction deals took a substantial turn for the worse in March, down 36 percent from the previous year.

Despite a strong first quarter for the industry, both residential and commercial construction contracts in South Florida plunged in March, according to new data published by McGraw Hill Financial. Commercial contracts fell 48 percent to $102.1 million. Meanwhile, residential contracts fell 30 percent to $256.1 million, the South Florida Business Journal reported.

The drop in residential contracts handed out in the month was surprising given that the numbers for the first quarter of the year were strong. Indeed, the dollar amount of new residential construction contracts signed in the first three months of 2014 rose a substantial 20 percent, the paper noted.

At the same time last year, construction contracts totaled $563 million. [SFBJ] — Sasha von Oldershausen

  • elliman

    we all saw this coming. Lets face the facts deveopers did not learn any thing all this hype from international buyers slowed down and they over built and over paid and over baught. i dont care if you give 50 percent deposits etc that does not mean anything, buyers are relisting their condos and realize they might of over paid. there is to much luxury condos to choose from what makes the next door condo different from the others. they did not build on deman they built on hype and thats the problem, hype is very very short term. How many floridans can buyer a 700K 1/1 CONDO WITH 700 DOLLAR PER MONTH associations. bottom line they inflated number and did the same thing. every developer deserves to be burned because they went of stupid numbers, try throwing in a few mor cars with your gimmicks to sell condos.

  • Really???

    I think you might have a hard time understanding what is being reported. The VALUE of contracts under construction went down year over year. This value is spiking around because we went from basically having nothing under construction and then spiked way high with a lot under construction. However the dollar amount signed is still higher, meaning we will be building even more into the future.

    And you numbers are just way off. most places aren’t selling 700k 1/1’s and if they are that is a completely different market. Most presales have been in the $300 to $500 per square foot. So you’re talking $320k for a 1/1 with $500 HOA on the smaller unit. You can get a 1/1.5 in Brickell Heights for $380k. It’s not going to be that hard to rent that unit out to someone who does live here and cover all your carrying cost when you put down 50%.

    Do these units appreciate at a fast pace? Probably not. But people aren’t going to get burned especially not developers who have presold and therefore have little risk.

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