As the South Florida preconstruction condo market shows signs of slowing, the minimum asking price for new units being marketed east of I-95 in the tri-county region during this current cycle has decreased by $6 per square foot on a month-over-month basis in Miami-Dade, Broward and Palm Beach, according to the latest Developers Price Survey for May from CraneSpotters.com.
The decrease in the minimum presale asking price comes at a time of preconstruction condo competition intensifying, the dollar strengthening against many foreign currencies, presale deposits falling at some high-profile projects and at least one high-rise development revising its design.
New condo developments are now asking a minimum price of $796 per square foot for units in South Florida as of May 18, compared to $802 per square foot as of April 10, according to the report that is based upon a combination of surveys of exclusive listing brokers representing preconstruction projects and MLXchange listings for nearly 200 new condo buildings that are currently selling or have been completed during this cycle. (For disclosure, my firm operates the website.)
In previous months, the minimum asking price per square foot for new condo units planned east of I-95 in South Florida increased from $745 in December 2014 to $753 in January to $764 in February to $773 in March, according to CraneSpotters.com.
The minimum price for preconstruction condo units in South Florida in October and November — the first months in which CraneSpotters.com began publishing survey results — was $772 per square foot at the beginning of the last winter buying season.
Back in October, less than 140 new condo towers with more than 16,900 units were being marketed for sale east of I-95 in South Florida.
Since then, the number of new condo towers and total units included in the monthly price survey has steadily increased to 146 buildings with 17,664 units in November; 152 buildings with 19,083 units in December; 170 buildings with 19,357 units in January; 180 buildings with 20,126 units in February; 188 buildings with 20,362 units in March; 195 buildings with 20,995 units in April; and 198 buildings with 21,169 units in May.
It is worth noting, the total number of preconstruction units included in the survey has increased as more projects have launched presales marketing campaigns combined with improved participation by exclusive presale representatives to inquiries from researchers at CraneSpotters.com.
Despite an increase in new condo projects for presale, the number of South Florida preconstruction units under contract or recently sold has held steady between 65 percent and 70 percent since October, according to the survey.
In the May survey, more than 14,655 units are under contract or recently sold, representing a ratio of about 69 percent in South Florida. By comparison, nearly 14,300 units were under contract or recently sold for a ratio of 68 percent in April.
The unanswered question going forward is whether the decrease in South Florida’s minimum presale price per square foot in May is an aberration or rather the start of a new trend in the highly competitive preconstruction condo market in the tricounty region.
Peter Zalewski is a 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.