As high-end inventory in South Beach gets snapped up, purchasers have been looking to Sunny Isles Beach for luxury oceanfront condos.
But while Zillow.com’s home value index shows the area to have the highest year-over-year increase in home values, at 15.6 percent, the story is a bit more complicated.
It’s not so much an indication of higher prices, but smaller discounts, said developer Gil Dezer, whose Trump properties in Sunny Isles have been leading the charge in the northern Miami-Dade County neighborhood.
“The way I see it, it’s not that prices are going up,” Dezer said. “It’s just that there’s less of a discount. In my mind, we’re still in 2008. Now, we’re off, and the question is by what percentage.”
Dezer said the company lowered prices in its Trump Towers in 2007 and 2008, spurring an uptick in sales, which have been coming in at around 25 units per month in recent months, which led to a “mortgage burning” ceremony (over which Donald Trump presided) in January to celebrate paying off the $210 million construction loan on Trump Royale.
Trump and Dezer ignited the note at a ceremony at the end of January.
The Trump properties in Sunny Isles are over the 50 percent sales mark, and Trump Towers has reduced its $265 loan to about $75 million, Dezer said. The company expects to have it paid off in its entirety by the end of the year.
“Generally speaking, if you look at the number of units that went up in Sunny Isles, about 6,300 during the boom, all of that is trading for north of $500 per square foot,” said Peter Zalewski, founder of Miami brokerage and consultancy Condo Vultures. “Because of the new product influx, and the fact that it’s cheaper than Bal Harbour or South Beach, that would make the most sense [for the improvement].”
Zillow.com’s data shows the home value index in the city to be at $225,500 — far short of the price of most high-end units currently on the market.
According to Condo Vultures data based on Miami-Dade County deed records, there were a total of 520 newly-constructed condo sales in the city last year, with a median price of $787,500.
“If the discounts are lessening, it’s because inventory is going down,” Dezer said. “I’m assuming that other developers are in the same position as me, because there’s less bank pressure because they owe less money. My statement always was, ‘I’m working harder to lose less money,’ so that’s what we’re doing.”
He said Sunny Isles’ success was something of an anomaly.
“Here in Miami and in our little microcosm here on the beach, we’re doing very well.”