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Is this the right time to buy a condo?
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Miami Condo Market:
To Buy or Not to Buy?

It's Varun here and welcome to my first newsletter! 

Let's talk about one question that's on every buyer's mind: Is this the right time to buy a condo? Let it be a first time home buyer or investment property buyers, everybody is wondering the same thing about the Brickell, Downtown, or Edgewater area.

We are seeing small pockets of discounts in the market and the numbers suggest it is definitely a buyer's market. Time will tell us how the preconstruction and existing resale market will be affected in coming months.

The current Miami real estate market is very different an the landscape of 2009. Developers have pretty much sold most of their inventory and are not in distress as they were in the last crash. We believe it's a re-sellers' distressed market, and we will see price corrections to accelerate in the near future. 

In 2017, developers will deliver 3,456 units new units to downtown Miami, according to the city’s Downtown Development Agency. Next year, the city expects another 2,846 new units.
This chart by StatFunding shows the plunge in sales and the surge in condos listed for sale. From February 2014 to February 2017, condo sales have plunged 25%. Andrew Stearns, StatFunding’s Founder and CEO, calls the resale inventory – the dark green line that has soared 90% since early 2013 – “scary”:

Even this “scary” inventory understates the total number of condos for sale. It only includes units listed for sale on the MLS. But developers normally don’t list their new units on the MLS, and thus they’re not included in the above chart. 

This is the distressed market that pre-construction condo flippers are facing.
Part of the Problem: Foreign buyers and money laundering
 
The Treasury Department's Financial Crimes Enforcement Network has figured out that there is a large amount of money laundering in housing. It has started making noises. Cash Deals are plunging in Miami-Dade. For example, in February they were down 17.5% year-over-year. 
What is the current inventory?
Source: Cranespotter.com 03.20.17
Miami-Dade county condo developers began to encounter difficulties selling units in 4Q 2015. Hence they have cancelled or postponed a lot of projects that were slated to break ground in 2017.

Brickell prices have declined approximately 10% to 16%, after peaking in 2014, we still see a further decline till 3Q 2017 before the market starts absorbing the excess inventory.
Read to Lead
(take aways from articles I've read)
  • While plenty of people want to buy, they're struggling to find suitable single-family homes priced at $500,000 and under. That shortage will be the main reason why values in the low and middle ends of the market will keep climbing higher -Sun Sentinel 2016
  • The influence of the foreign buyer will erode -Sun Sentinel 2016
  • A Miami real estate analyst has officially hit the “distressed” button on the city’s condo development market.  –StatFunding.com
Distressed Deal of the Week
900 Biscayne Blvd
Original Listed Price: $719,000 | Current Listed Price: $599,000
 
Description
2 bd 3 br | Spectacular water view | Large balcony throughout the unit | Elevator with private lobby
For further details please contact us.
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Varun Hemraj

Real Estate Advisor
Keller Williams Realty
varunhemraj@kw.com
TheBrickell.com
Copyright © 2017 TheBrickell.com. All rights reserved.

Disclaimer: The information contained in this report was obtained from sources deemed to be reliable. Every effort was made to obtain accurate and complete information; however, no representation, warranty or guarantee, express or implied, may be made as to the accuracy or reliability of the information contained herein.


Sources: 
http://www.businessinsider.com/miamis-condo-market-flippers-2017-3
https://statfunding.com/sites/publications
http://www.sun-sentinel.com/real-estate/fl-outlook-real-estate-20161223-story.html


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