The Real Deal Miami

Miami’s home selloff could be complete by the end of 2012

By Alexander Britell | March 23, 2012 05:30PM

Midtown Miami

It was an impossible dream just a few years ago, but the selloff of Miami’s new construction inventory could be complete by the end of 2012, brokers say.

The developers behind a new wave of condominium towers either under construction or in the planning stages are motivated by Miami’s drastic drop in residential inventory.

“Right now, we’re watching the rapid completion of the selloff of the remaining inventory that was built from 2005 to 2008,” said ISG’s Philip Spiegelman. “At the pace we’re on, the selloff will be finished by the end of the year; we’ll have absorbed everything that all the pundits said would last us another 10 to 12 years.”

A recent report from Condo Vultures shows less than 1,750 units remaining under the control of their original developers at the end of 2011.

They were being absorbed at a pace of 150 developer condo sales per month, according to Condo Vultures data.

The inventory drop has caused a significant increase in Miami home prices, while the rest of the country is seeing quite a different trend – fewer sales, and lower prices.

Miami home prices rose for the third month in a row in February, led by the condo market, which saw its median sales price jump by 40.4 percent to $131,950, according to a report from the Miami Association of Realtors released yesterday.

The median sales price for single-family homes similarly increased, rising to $175,000, a 19 percent uptick.

“I think the thing that sticks out the most is the limited inventory,” said Danny Hertzberg, a Realtor with Coldwell Banker’s The Jills in Miami Beach.

That’s particularly true in areas like downtown Miami, Hertzberg said. Up until recently, there was a large number of units on the market with multiple options in each new-construction building.

“There were so many options in any given line, because they would keep reducing [prices], and buyers were only putting offers on the lowest one,” he said. “Now, there are fewer properties on the market and there are more people coming in from the sideline, who have been waiting to buy.”

According to Giancarlo Cuffia, managing director and Realtor at Engel & Voelkers in Sunny Isles Beach, the market has shifted to the degree that it’s getting hard just to purchase units.

“Most of the units have already sold,” he said. “We have to get really close to the asking price, and, in some cases, in order to get the unit, we have to go over the asking price.”