South Beach’s high-end market holds its own
South Beach residential real estate prices are staying strong at the high end as buyers fork over cash to buy ultra-luxury condominium units.
Upper-echelon properties, especially those in the South of Fifth neighborhood, are holding their own and, in some cases, fetching more than expected.
“In South Beach, I would say prices are holding, prices are coming back,” said South Beach realtor Andres de Solminihac, an associate with Keller Williams in Miami Beach. “I saw a few transactions where the buyers expected to get lower prices, and the sellers got even higher prices than the first bids.”
He cited one example at the Portofino tower, where the first offer for a $2.2 million unit came in at $1.5 million, and that was out-bid by a $1.55 million offer. Finally, a buyer came and offered $1.725 million and the deal closed in 15 days.
Either way, buyers are still willing to pay a premium for units at the upper-reaches of South Beach’s luxury inventory.
“Everybody wants to be in South Beach,” said broker Rusty Stein of Rusty Stein Real Estate in Miami Beach. “It’s the hot spot.”
De Solminihac said prices at all price points were staying strong in South Beach, as compared to the rest of Miami.
Just 17 newly-constructed condo units were sold in the first quarter of the year in South Beach, according to a recent report by Condo Vultures, compared to more than 700 of the same in greater downtown Miami. For all of South Beach’s high-end buildings, however, the number bumps up to 31, a 24 percent increase over the 25 sales in the same period in 2009.
The Condo Vultures report focuses on “new” buildings, that is, buildings constructed in the past seven years, which means it didn’t address several of the slightly older, ultra-premium condo towers, especially those south of Fifth Street.
De Solminihac, who has conducted analyses of the South Beach luxury market for the past five years, says if one expands the data to all super-premium buildings, there are more than double the number of new-construction buildings.
De Solminihac said his data, which looks at what he considers the 11 ultra-luxury buildings south of 25th street, including the Setai, the Portofino Tower and Il Villagio, show 31 units closing in the first quarter of 2010. That number does not include 11 sold at the W South Beach, which were sold by the developer.
Like de Solminihac, Stein said purchasers were not just confining themselves to the high end or to South Beach.
“All other places are starting to sell, of course, at very depressed prices,” stein said, adding: “In Miami Beach, in certain buildings, even the second-hand buildings, like the Floridian, unless they’re short sales, their prices are holding their own,” she said. “Because more and more people, when they think of Miami Beach, they think of South Beach.”
De Solminihac’s data shows 272 condo unit sold in South Beach in the first quarter, an 8 percent increase over the fourth quarter of 2009, and a 51 percent rise over the same period in 2009.
According to Condo Vultures, the 17 new units sold on South Beach in the first quarter of 2010 had an average closing price of $1,364 per square foot. The brokerage and consultancy said the 11 W South Beach sales HAD prices averaging $1,649 per square foot.
Stein said buildings with high-end profiles, like the W, and the Setai, are especially holding their own due to an increase in buyers from out of town, including New York.
“The W, even more than some of the other buildings, is [staying strong] because it’s a well-known name. It’s not people from here that are buying; it’s people from New York and other areas.”