Downtown Fort Lauderdale and Beach condo market strengthens
Question: What is happening in the condo market in the Downtown Fort Lauderdale and Beach area?
The Downtown Fort Lauderdale and Beach condo market has been gaining strength for the last two years with the number of preconstruction projects tripling, and the average resale transaction price surging by 33 percent.
Optimism is growing in the Downtown Fort Lauderdale and Beach area as a result of several factors, including the return of domestic buyers to the market who are not focused strictly on distressed units, combined with an increase in the number of foreign investors looking for a cheaper alternative to Miami-Dade County.
Currently, 35 new condo buildings with more than 2,800 units have been announced for the Downtown Fort Lauderdale and Beach market, as of Thursday. A year ago in February 2014, only 10 condo buildings representing less than 300 units had been announced for the area since 2011, according to the preconstruction condo projects website CraneSpotters.com. (For disclosure, my firm operates the website.)
The Downtown Fort Lauderdale and Beach market now ranks as the third most active preconstruction condo market, based on announced units to be developed east of Interstate 95 in the tri-county South Florida region of Miami-Dade, Broward and Palm Beach.
In February 2014, the Downtown Fort Lauderdale and Beach market ranked as the 12th most active preconstruction condo market, behind Pompano Beach at No. 10 and Miami’s Coconut Grove neighborhood at No. 11.
Presale prices have been a key reason for the preconstruction condo activity in the Downtown Fort Lauderdale and Beach market and all of Broward County.
The average minimum price per square foot for a new Broward County condo unit is less than $500 per square foot, compared to Miami-Dade County where the price is more than $850 per square foot, according to the CraneSpotters.com Developers Price Survey for January 2015.
As presale prices and newly proposed inventory have mushroomed in Miami-Dade County to more than 205 towers with nearly 30,000 units, preconstruction buyer interest is increasingly looking north to Fort Lauderdale and Broward County.
An example of this movement has been the recent launch of presales for two new condo projects on the barrier island in Fort Lauderdale by developers from Miami-Dade County.
The Related Group is now actively marketing the planned Auberge Beach Residences, and the Newgard Development Group is proceeding with the planned Gale Residences.
The Downtown Fort Lauderdale and Beach preconstruction condo market has intensified as the area’s resale market has increased in price.
The average resale price for a condo unit in Downtown Fort Lauderdale and Beach market reached nearly $285 per square foot in 2014, compared to less than $250 per square foot in 2013 and about $215 per square foot in 2012, according to the Southeast Florida MLXchange.
In 2006, at the peak of the last South Florida real estate cycle, the average resale price for a condo in the Downtown Fort Lauderdale and Beach market was more than $365 per square foot. This means the 2014 condo resale price is still 22 percent below prices from nine years ago.
It is worth noting that it is not all positive news in the Downtown Fort Lauderdale and Beach condo market.
Annual resales in the Downtown Fort Lauderdale and Beach market slipped by 2.4 percent to less than 1,090 condo deals in 2014, compared to nearly 1,115 transactions in 2013.
Currently, more than 680 condos priced at an average of about $382 per square foot are on the resale market in the Downtown Fort Lauderdale and Beach market, representing about 7.6 months of supply.
A balanced market is considered to have about six months of supply. More months of supply suggests a buyer’s market and less months of inventory indicates a seller’s market.
The unanswered question going forward is whether the Downtown Fort Lauderdale and Beach market will ultimately complement or compete with Miami-Dade County for prospective condo buyers who want to purchase a unit in South Florida.
Thought of the week: Shark Tank’s Barbara Corcoran “trusts” Keller Williams in South Florida
Barbara Corcoran, the original co-founder of The Corcoran Group real estate company and a cast member on ABC’s TV program “Shark Tank,” has recorded a commercial declaring her confidence in a South Florida real estate broker from Keller Williams.
“In South Florida, I trust Roman Pavlik,” Corcoran said in the advertisement that is running on the cable channel CNBC. “Roman understands how to market luxury waterfront homes in South Florida.”
Pavlik is the qualifying broker for Keller Williams Eagle Realty that has a “main address” in Palm Beach Gardens and a “license location” on Northeast 90th Street in Miami, according to the Florida Department of Business & Professional Regulation records.
For what it is worth, The Corcoran Group brand — which is now owned by NRT New York LLC — has its South Florida realty headquarters in the town of Palm Beach, according to government records.
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.