Deep pockets required

South Florida culture is all about embracing the latest social trend, whether it’s automobiles, boats, fashion, sports or real estate.

As the 2013-14 winter tourism season comes to an end, preconstruction condo projects designed by famous architects or offering must-have lifestyle upgrades are the latest craze for local residents and out-of-town investors.

Gone are the recent days of number-oriented cash buyers who scoured Miami-Dade, Broward and Palm Beach counties in search of distressed condos to acquire at deep discounts, remodel on the cheap and resell at a premium.

Distressed condos currently represent less than 15 percent of the 24,500 units on the resale market in South Florida, accounting for about 1,450 short sales and nearly 2,050 bank-owned units, according to the Southeast Florida MLXchange.

As a result of the shrinking inventory, it is no longer trendy to be frugal when playing the South Florida real estate game.

Given the improving U.S. economy and stock market, the current focus of many of today’s South Florida condo buyers is on big-ticket purchases that will impress the masses. Nearly 1,900 condos currently for sale in South Florida, some 8 percent of the overall available inventory, come with an asking price of at least $1 million.

Of this pool of luxury resale units, nearly 750 units are priced for at least $2 million, about 185 units are priced for at least $5 million and nearly 50 units are on the market for at least $10 million.

The distinction of the highest priced condo on the market is a tie at $50 million between two penthouses in projects under construction in Miami-Dade County.

The proposed Mansions at Acqualina in Sunny Isles Beach is offering a seven-bedroom penthouse with nearly 17,500 square feet of living area at $2,860 per square foot. In Miami Beach, Faena House is marketing a nearly 8,300-square-foot penthouse for nearly $6,050 per square foot.

The trend toward condo units that have one-of-a-kind features, such as a private automobile elevator that can deliver a car to the floor of its owner, or a single unit comprising an entire floor in a skyscraper, is triggering another condo boom in South Florida. Some 200 new condo towers are proposed east of I-95 in South Florida, from Greater Downtown Miami to Fort Lauderdale to West Palm Beach. The mean minimum asking price through March was about $725 per square foot, according to a survey conducted by the preconstruction condo projects website CraneSpotters.com (For disclosure purposes, my firm owns and operates the website.)

Many of the proposed units in South Florida are slated to be delivered “designer ready,” meaning additional costs will be incurred to install floors, baseboards, light fixtures and other aesthetics.

Industry watchers said it is reasonable to assume that the build out of these raw condo units could cost at least $25 per square foot.

As buyers increasingly look at purchasing the more than 27,000 preconstruction condo units proposed for South Florida, it is worth noting the average asking price for a condo resale east of I-95 is less than $490 per square foot in Miami-Dade, less than $265 per square foot in Broward and less than $200 per square foot in Palm Beach.

The unanswered question is just how long big-ticket condo purchases will be trendy among buyers in the 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.