Developers have already “sold” nearly 10,150 new condo units proposed for the South Florida coastal region during this latest preconstruction boom that began in 2011.
The preconstruction sales total represents about 29 percent of the nearly 35,000 new condo units announced to date for sites located east of I-95 in Miami-Dade, Broward and Palm Beach counties, according to the preconstruction condo projects website CraneSpotters.com.
(For disclosure purposes, my firm operates the website.)
The presale total represents more than 60 percent of the nearly 16,200 preconstruction units that are currently being marketed for purchase by condo developers in coastal South Florida. Most of the other proposed preconstruction condo units have not yet launched presales.
Current presale figures were collected by researchers at CraneSpotters.com as part of a monthly “Developers Price Survey” of listing brokerages that are exclusively marketing preconstruction condo projects in South Florida.
To be considered “sold” in today’s South Florida preconstruction condo market, the proposed units must be under presale purchase contracts or – better yet – already sold to the buyer in closed transactions.
In purchasing a presale condo unit in coastal South Florida, buyers are typically asked to commit to a series of deposits that ultimately total about 50 percent of the contracted purchase price.
By comparison, developers collected deposits of as little as 10 percent during the last South Florida condo boom, triggering what some contend was widespread speculation that resulted in some 49,000 units being developed east of I-95 in the region’s seven largest markets.
Developers claim the higher deposit requirements today ensure that only those well-capitalized buyers who can fulfill their preconstruction contracts can purchase during today’s South Florida condo boom.
The higher preconstruction deposits do not appear to be stopping condo buyers from purchasing units at a steady pace.
A closer look at the presale statistics reveals that many of the announced projects that are marketing units for presale are experiencing success in South Florida.
At least 23 new condo towers with a combined 1,775 units have reportedly sold out. An additional 25 new condo towers with 3,370 units are said to have sold at least 90 percent of their proposed units.
Additionally, nine new condo towers with nearly 1,700 units are at least 80 percent presold, while another 21 towers with nearly 2,400 units reportedly entered into contracts for at least 70 percent of their planned inventory.
Overall, more than 90 new South Florida condo towers have reportedly sold at least 50 percent of their 11,500 units planned for South Florida.
The unanswered question going forward is whether enough preconstruction condo buyers with 50 percent deposits are around to purchase the remaining 25,000 units that have been announced for the coastal South Florida market.
Peter Zalewski is real estate columnist for The Real Deal who founded Condo Vultures LLC, a consultancy and publishing company, as well as Condo Vultures Realty LLC and CVR Realty brokerages and the Condo Ratings Agency, an analytics firm. The Condo Ratings Agency operates CraneSpotters.com, a preconstruction condo projects website, in conjunction with the Miami Association of Realtors.