Condo sales in Miami were up 134 percent in January year-over-year, according to the Miami Association of Realtors. That’s not a typo: It’s Miami Market heat!
â€œThe Miami market continues to outperform the rest of the nation mostly due to the strong impact of international buyers and record affordability,â€ said Jack H. Levine, Chairman of the of the MAR. International buyers, low prices, and the weak dollar are certainly pushing the sales, but with those sales is coming a new phenomenon not seen since the housing boom.
Yes, prices for condos are down 36 percent annually to a median price of $91,200, but those prices are beginning to stabilize, despite the fact that there are about 3600 vacant units on the market in downtown Miami alone. Huh? How do prices stabilize with a three to four year supply??
“I think the way you get prices going up is by artificial price setting,” claims Peter Zalewski, principal at Condo Vultures, a real estate sales and consulting firm.
“I’m not going to use the C word, collusion, but there’s a certain price mechanism that all of the owners are starting to abide by and adhere to.”
Witness the new Canyon Ranch condos. Units were selling at $555.24 per square foot in 2010. This year they are selling at $634.25 psf, even though there are still 175 vacant units. Last week the sales team threw a lavish party for potential investors, complete with massage therapists, a climbing wall and a yoga team to greet you at the door.
“The party’s are back and there’s a reason the parties are back: The market’s hot, there’s a mini boom going on throughout South Florida,” says Michael Sadov, Director of Real Estate Sales at Canyon Ranch.
But Zalewski is concerned prices are already pushing the limit, and that Miami may already be getting “passÃ©” as a great deal for investors.
“Pricing right now is discounted, but people who own product and are trying to resell are trying to push up pricing,” warns Zalewski. “Right now there’s a little bit of a face off between the buyer and the new seller.”
By: Diana Olick
CNBC Real Estate Reporter