The Real Deal Miami

Questions arise after condo presales fail to begin at eight new North Bay Village towers

Based on 2014 sales, SoFla has a six-year supply of ultra-luxury condo units for sale

March 27, 2015 03:45PM
By Peter Zalewski

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Peter Zalewski of CondoVultures

Peter Zalewski of CondoVultures

Can you tell me the status of the new condo developments at North Bay Village?  I understand that there are four to five developments being planned. What do you think will be the price per square foot and the upsides and downsides of buying in North Bay Village?

North Bay Village  an island community of 7,400 people located in Biscayne Bay between the Miami mainland and the barrier island city of Miami Beach  is emerging, at least on paper, as a hot spot for new condo development during this current South Florida real estate cycle.

Developers have already announced plans to build eight new condo towers with nearly 750 units on the two islands that together make up the municipality of North Bay Village.

Despite the announcement activity by developers since 2011, none of the preconstruction condo projects have publicly started to market units for presale, according to the Southeast Florida MLXchange and the CraneSpotters.com Developers Price Survey for March. (For disclosure, my firm operates CraneSpotters.com).

The nonexistent preconstruction activity in North Bay Village is counter to the overall trend in South Florida, where more than 185 new condo towers with nearly 20,400 units are currently being marketed for presale purchase.

It is worth noting that developers have announced 335 new condo towers with nearly 43,000 units east of I-95 in Miami-Dade, Broward and Palm Beach counties as of today.

Given the lack of presale information currently available, it can only be assumed that the preconstruction prices for new condo projects in North Bay Village will come in at about 25 percent higher  this is a guestimate based on research from CraneSpotters.com  than the current resale market in the island community.

Currently, about 175 condos are available for purchase in North Bay Village at an average asking price of $285 per square foot, with individual unit prices ranging from less than $120 per square foot to more than $725 per square foot, according to data from the Southeast Florida MLXchange.

In 2014, buyers purchased more than 230 condos at an average price of less than $235 per square foot.

Last year’s resale transaction activity was down 10 percent from 2013, when buyers purchased nearly 260 condos at an average price of $210 per square foot, according to the data.

Based on the 2014 sales pace of about 19 unit transactions monthly, North Bay Village currently has more than nine months of condo supply available for purchase.

A balanced market is considered to have about six months of condo supply available for purchase. More months of inventory suggests a buyer’s market, and less months a seller’s market.

The unanswered question going forward is whether all of the North Bay Village developers will follow through with their previously announced preconstruction plans, given the current state of the area’s resale market.

Thought of the week: Five dozen South Florida ultra-luxury condos listed for at least $10 million each

More than 60 ultra-luxury condo units are currently listed for sale with a price tag of at least $10 million, each, in the tricounty South Florida region of Miami-Dade, Broward and Palm Beach, according to data from the Southeast Florida MLXchange.

These optimistic sellers are asking an average of more than $3,080 per square foot with the highest listing price equating to nearly $6,050 per square foot for a three-bedroom unit in the W South Beach in Miami Beach.

For what it is worth, buyers purchased 10 ultra-luxury units in South Florida that were listed for at least $10 million each in 2014. The average transaction price in tri-county region for the ultra-luxury units that traded was less than $2,850 per square foot in 2014.

Based on the 2014 sales pace, South Florida currently has more than a six-year supply of ultra-luxury condo units available for purchase.

Peter Zalewski is a real estate market consultant, non-practicing licensed real estate broker and columnist for The Real Deal who now answers reader questions about the South Florida real estate market in a new weekly Friday column. Questions and comments can be sent to southfloridanews@therealdeal.com. The TRD editors will choose which submissions will be addressed.

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