Lately I’ve seen large fluctuations in the average price per sqft on the sales of South Beach condos. Since there aren’t any major price changes (in either direction) happening these days, I started to dig a little deeper and found that the reason is generally simply that there is one (or a handful) of large transactions that have a major impact on the average price per sqft.
For example, in June a penthouse at the Setai sold for $15,000,000 or just over $2400 per sqft. This one sale accounted for almost 20% of the whole transaction volume of sales in the month of June (~77 mio. worth of South Beach condos changed hands that month) and thus had a major impact on all the averages.
To further illustrate this point let’s look at the month of July 2010.
There were 78 sales made in July, with 9 condos selling for $1 mio. or more. As you can see from the following graph, these 9 condo sales account for almost 50 % of the total transaction volume for the month of July. Do you think that this would affect the numbers in a major way ?
If you’re wondering why I’m pointing this out, just think about all the statistics you read about the real estate market and whether they are affected by similar issues. In other words, don’t trust any statistics without knowing all the details.
So after all of this, what do you think is happening in the South Beach condo market ? Is it stabilizing, improving or still declining ?