Developers have sold 85 percent of the condos built in South Florida during the building boom beginning in 2002, according to a report released this week by Bal Harbour-based consultancy Condo Vultures.
The report, which studies condo markets from South Beach to West Palm Beach, found that developers have sold 41,258 condos in the last eight years, with the largest chunk of sales taking place in downtown Miami.
“People are certainly taking advantage of the fact that [condos] are affordable and available both to live in and also to invest in,” said Leo Zabezhinsky, manager of business development and real estate for the Miami Downtown Development Authority.
While many of the boom-time buyers were speculators, many of today’s buyers are investors and vultures, hoping to capitalize on the troubled market by renting out the units.
That explains much of the shift in sales activity taking place between South Beach and downtown Miami, as rental demand is up in places like Brickell and purchase prices are lower in the city than by the ocean, said Peter Zalewski, principal at Condo Vultures.
“An investor comes in, they look in South Beach, and they get sticker shock,” he said. “If they want to be on the sand, they go up to Sunny Isles Beach. If they’re looking for investment value, new construction, they go to downtown Miami.”
Spurred by bulk buyers and lender takeovers, condo sales in downtown Miami reached 3,675 in 2010, up 57 percent from 2009, according to the report, based on county records. Condo sales in South Beach totaled only 123 last year, up from 107 in 2009. At the current sales pace, it would take about a year to sell out the remaining developer inventory in downtown, and more than a decade to sell the 1,300 new condos in South Beach.
Areas like downtown Fort Lauderdale benefitted from good timing, as developers completed most of their condo projects before their housing market crashed. There are only 160 new condos yet-to-sell in downtown Fort Lauderdale, where more than 5,000 units were built during the boom.
Condo Vultures focused its report on seven housing markets in Miami-Dade, Broward and Palm Beach counties, concentrating on areas east of I-95 and near bodies of water. During the 8-year span covered in the report, 244 new condo projects were created in those markets, for a total of nearly 50,000 units.
The epicenter of the building, sales and developer default activity has been in downtown Miami and Brickell, where more condo units were built in the 2000s than in the previous four decades combined.
About 18,675 new condos have sold in the downtown area in the last 8 years, totaling about 84 percent of the inventory, according to the report, based on county records.
Developers “built 23,000 condos, and when over 80 percent have been sold and occupied, clearly it tells you that this is where people want to live and invest,” said Zabezhinsky. “The condos have single handedly helped lead the transformation of downtown Miami into a 24/7 global city.”