Resales at new Sunny Isles project may reflect trouble in the market

A newly built Sunny Isles Beach project may be telling of the state of the luxury market’s health.

Last August, Key International completed 400 Sunny Isles, a 230-unit luxury condo development, and by this March the developer had sold nearly all of its units for a combined $206 million.

Now, a surge of resale inventory has hit the market: 37 percent of the 230 units are listed for sale for a combined listing volume of $119 million.

The 85 units currently on the market range from $776,000 for unit 706, a two-bedroom condo; to $3.8 million for Penthouse 4, a three-bedroom unit, according to data from Condo.com as of May 9.

400 Sunny Isles, comprised of two 21-story towers, joins a number of luxury projects in Sunny Isles Beach recently completed, including Mansions at Acqualina, Chateau Beach and Regalia. And there’s more to come: Porsche Design Tower, Muse, Turnberry Ocean Club, Aurora, Ritz-Carlton Residences, Sunny Isles Beach and Estates at Acqualina are all in planning or construction phases.

While Miami ranks in the world’s top 10 luxury property markets according to a recent report, the strong dollar and turbulent foreign governments have already caused a noticeable decline in foreign buyers, aka the bread and butter of South Florida’s condo market.

Ron Shuffield, president of EWM Realty International, told The Real Deal last week he had already begun to see increasing inventory and sales falling off as early as last August.

And 400 Sunny Isles is not the only newly completed project with significant listings. At Mansions at Acqualina, 14 units out of 86 — 16 percent — are on the market for a combined $137 million. At Regalia, 11 units out of 39, representing 28 percent, are available for sale for a combined $146 million.

On the flip side, at least two developers are confident about the city’s condo market: Fortune International Group and Chateau Group retooled their planned residential project in Sunny Isles in April, scrapping plans for the project’s hotel and apartment components, which will be located at 18801 Collins Avenue, and increasing the number of condos.

Overall in Miami’s luxury condo market, inventory was up 55 percent at the end of April 2016 compared to a year earlier, Shuffield said. Sales of luxury condos, defined as $1 million and up, were down 24 percent during that same period. Shuffield said buyers are just waiting for the market to stabilize.

But some experts claim that high inventory drags down prices.

At a commercial real estate summit in New York last week, developer Steve Witkoff, who owns a hotel in South Beach, commented on the Miami market: “Miami is a brewing storm,” he said, “and it’s going to get even worse out there.”