Thanks to Peter Zalewski of Condovultures for this article.
South Beach new condo sales doubled in the second quarter of 2010 on a quarter-over-quarter basis to 31 individual transactions even as the average price held steady at $1,365 per square, according to a new Condo Vultures® White Paper™.
Not included in the new sales totals from April through June 2010 is a 46-unit bulk deal that traded for $29.6 million, or $436 per square foot, in the Capri South Beach condominium fronting Biscayne Bay, according to the Condo Vultures® Bulk Deals Database™.
For the second consecutive quarter, all of the individual new South Beach condo transactions occurred in three projects – the W South Beach Residences, Continuum on South Beach North Tower, and the Mondrian – even though an additional 18 new condo projects still have unsold developer units, according to the report based on the Condo Vultures® Official Condo Buyers Guide To South Beach™.
“Only 16 of the 37 new South Beach condo project with at least 25 units are completely sold out yet all of the individual transactions this year are occurring in three projects,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. “Given the names of the projects and the average prices being achieved, it is safe to assume that buyers are going for quality as a hedge against the unknown. When the developer units start selling in the other new South Beach projects that should be a clear sign that confidence is returning.”
South Beach is the trendy neighborhood on the southern portion of the barrier island that attracts celebrities and athletes, jet setters and working class tourists alike who all come looking for the Miami Beach experience.
The latest sales activity means 76 percent of the 5,600 new condos built since 2003 in South Beach have now been sold. South Beach is defined as South Pointe Drive north to 24th Street, the Atlantic Ocean east to Biscayne Bay for the Condo Vultures® Official Condo Buyers Guide To South Beach™.
This year’s new South Beach condo sales are on pace with that of 2009 despite concerns about Gulf of Mexico tar balls from the BP rig disaster washing up on the South Florida shores. Condo Vultures® is hosting a three-member expert panel on Aug. 10 to examine the situation from an environmental and real estate perspective.
In the first half of 2010, 48 new South Beach condos sold for $72.8 million, or $1,365 per square foot. During the same six-month period of 2009, there were 49 new condo sales for $51.3 million, or $844 per square foot, in South Beach.
As steady as the sales are the velocity is still off from the first half of 2008 when buyers purchased 300 condos for $594.4 million, or $1,071 per square foot, according to the report.
The W South Beach Residences condominium-hotel project is one of those project not experiencing a reduction in pricing from the downturn in the U.S. economy or even the dramatic crash of the South Florida housing market, according to the report.
More than 40 percent of this year’s new condo sales are occurring in the W South Beach Residences on the northern edge of the Miami Beach submarket.
Developers of the 20-story, oceanfront W South Beach project in Miami Beach were able to sell 22 units in the condo-hotel for $34.6 million, or an average of more than $1,625 per square foot, in the second quarter of 2010, according to the report.
The recent sales activity means the 408-unit W South Beach project is nearly 20 percent sold out some 18 months after the first sale in March 2009, according to CondoVultures.com.
In the South of Fifth area, the developer of the Continuum on South Beach North Tower sold two units at an average of $1,300 per square foot in the second quarter of 2010. This follows the first quarter when the developer sold three units. Some 28 months after the first sale, the developer of the Continuum North Tower still has more than 15 percent of the project unsold, according to the report.
The situation is even more challenging for the developer of the Mondrian condominium, where seven units sold in the second quarter at an average of $689 per square foot. More than 200 units are still in developer’s hands in the retrofitted project fronting Biscayne Bay, according to CondoVultures.com.