Condo sales have dropped. Inventory is up.
While single-family homes have cemented themselves as prized possessions, demand for condos has weakened across most of South Florida, third quarter reports show. This will continue as condo buildings are forced to comply with new state laws that make condo living more expensive. (Also, I’d like to note that while single-family home sales outperformed condo sales, it wasn’t the best quarter for home sales.)
Condo sales in Miami Beach and the other barrier islands declined 26 percent year over year to 583 sales, according to the Corcoran Group’s report. This marked the greatest annual decline in five quarters, and the lowest number of third quarter condo closings in this submarket since 2013. Listings were up 35 percent compared to the same period last year. That means more owners are trying to sell at a time when closings have fallen by more than a quarter.
On the mainland in Miami-Dade, condo sales fell 20 percent in what Corcoran said is the slowest third quarter since 2017.
Jonathan Miller, an appraiser and housing market analyst who creates Douglas Elliman’s reports, says inventory for most markets he covers is still “starkly or significantly below” pre-pandemic levels.
And pricing has generally continued to grow, in part because buyers are gravitating toward newer or better maintained condos that are more expensive. In Palm Beach, for example, where few condos exist and the median price is $1.35 million, sales rose.
The condo market is reflective of what’s been happening socioeconomically. Specifically, the disappearing middle class. Wealthier buyers are gravitating toward the higher end of the market.
For lower-income buyers, the more affordable option is not so affordable. Buying in these older buildings can come with a hefty insurance premium, which the entire community pays for. Unit owners are also responsible for special assessments or increased monthly dues to fund repairs and fill the associations’ financial reserves. And if the building doesn’t meet your lender’s requirements, you’ll have to make a bigger down payment.
Ana Bozovic, a broker who also publishes her own reports, said segments of the residential market that are “catering to the wealth and talent migration,” such as the single-family home market, are outperforming everything else.
“This is all part of that ongoing polarization of wealth and belief systems I keep talking about and I don’t see it reversing,” she said. “To the contrary, I see it accelerating over the next five years.”
What we’re thinking about: Now that Terra and Turnberry have secured a $75 million taxpayer infusion to fill a funding gap in construction costs for the Miami Beach convention center hotel, will the project get built? Construction costs were originally pegged at roughly $400 million, but have since ballooned by another $200 million. Send me a note at kk@therealdeal.com.
CLOSING TIME
Residential: Power couple David and Victoria Beckham paid $72.3 million for the waterfront spec mansion at 4736 North Bay Road in Miami Beach. Developer Niklas de la Motte sold the 14,270-square-foot, nine-bedroom estate.
Commercial: Florida Power & Light paid $60 million for nearly 350 acres of land in south Miami-Dade County. EuroAmerican Group and EuroAmerican Krome sold four parcels for $41.7 million; and an entity tied to the Ardid family’s Miami-based Key International sold the northernmost parcel of the assemblage for $18.3 million.
NEW TO THE MARKET
The 15,000-square-foot oceanfront estate at 1540 South Ocean Boulevard in Palm Beach hit the market for $88 million. Top broker Christian Angle, owner of Christian Angle Real Estate, has the listing for the one-acre property. It includes eight bedrooms, 12 and a half bathrooms and a tunnel that connects the main estate to the beachfront cabana. (I toured one of these cabanas via a tunnel last week; video coming soon.)
A thing we’ve learned
Damage from Hurricane Milton could reach $34 billion, with up to $28 billion of that considered insured wind and flood losses, according to CoreLogic. The estimated damage from both Milton and Helene is expected to top $100 billion.
Elsewhere in Florida
- Neo-Nazis joined a Trump boat parade in Jupiter last weekend, Rolling Stone reports. They were shouting “White Power,” “Heil Trump” and “Make America White Again.”
- Miami City Commissioners voted 3 to 2 to receive lifetime pensions, reviving a program that had been frozen during the financial crisis, according to the Miami Herald. Commissioner Damian Pardo and Manolo Reyes voted against the resolution, with Pardo saying that he viewed it as “self-dealing” and that he would have preferred voters decide. Reyes said he would opt out.
Hurricane Milton caused between $1.5 billion and $2.5 billion in damage to farmers and ranchers, the News Service of Florida reports. That adds to more than $1.5 million in damages sustained from three other storms that hit Florida over the past year.