While Miami Condos Cool, Neighboring Towns and Cities Heat Up
A strong dollar and overdevelopment are seen as reasons why new developments in Miami are not selling. That’s far from the case in surrounding cities, though.
It’s a nervous time for Miami developers as the market cools and many units remain unsold compared to a year ago. “Sales are slow with few exceptions,” Edgardo Defortuna, president and CEO of Fortune International Group, a real estate development, sales and brokerage firm, told Mansion Global. “They’re waiting for the rescue boat to come in and lift them out of the water,” he added. Indeed, Business Insider reports that sales in Miami-Dade County have plunged — down 25 percent from February 2014 with inventory up 90 percent since early 2013 and available condos sitting on the market are sky high.
That’s not the case, however, in towns outside Miami. Defortuna beams when discussing his company’s 192-unit Jade Signature development in Sunny Isles Beach, north of Miami Beach. “We sold $51 million worth of units in the first quarter,” Defortuna said, adding that the building, which was launched in 2013, is “95 percent or 96 percent sold out.”
Not all reports though call for Miami realtors to hit the panic button. Sure, the numbers are erratic but many believe the worst is now over.
“The metrics are a little bit all over the place,” Jay Parker, CEO of Douglas Elliman Real Estate Florida Brokerage, told the Miami Herald in April. “But the region is seeing better results than in 2016. I’ve heard so many people talk about an impending bloodbath or meltdown or implosion. That’s not what we’re seeing, and it’s validated by statistics.”
With prices estimated to be a third lower in Fort Lauderdale than those in South Beach, developers, noticing rapid sales, are scrambling to put up new buildings in a frenzy reminiscent pre-2008 gold rush. Fortune International and the Related Group have partnered to built Auberge Beach Residences & Spa by the water in Fort Lauderdale. The two towers, says Mr. Defortuna, are 95 percent and 60 percent sold out respectively.
The strong US dollar has played a role too. Foreign buyers, around 75 to 80 percent of the Miami investors have backed away as the dollar has gained in strength. Domestic, US buyers have made up the majority of sales (80 to 85 percent) in Fort Lauderdale, with the airport very convenient for New Yorkers looking for a second home.
Indeed, transportation is a vital component to determining the success of a market. Defortuna expects Asian buyers to increase in Miami next year with the addition of direct flights from certain Asian cities to Miami. Turkish buyers have increased in Miami since the introduction of a n Istanbul to Miami direct flight.
With financing deals set in place before the Miami market cooled the Wall St. Journal reports that the Miami market is set to see the highest number of condos delivered since 2008 — around 3,500 new units in all, according to a report commissioned by the Miami Downtown Development Authority. That number is expected to decline below 2,000 by 2019. These are some of the new Miami developments launching this summer:
- PARAMOUNT Miami Worldcenter, 1010 NE 2nd Ave., Miami
- 2000 Ocean, Hallandale Beach, Florida
- 111 First Delray, Delray Beach, Florida
- Ocean 20, Deerfield Beach, Florida
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