Miami realtor Ron Shuffield, part owner of Esslinger Wooten Maxwell which is under Home Services of America, Inc. an affiliate of Berkshire Hathaway, and president of their Coral Gables office has more than two decades of experience in the city’s real estate market. When asked to project the outlook of the Miami condominium market here’s what he had to say:
About new buildings in the area as well as those currently in progress:
The most frequent topic of conversation in the condo market is value. What’s the value? Truth is, it is a matter of analyzing building-by-building, neighborhood-by-neighborhood. The rebound of this recession is very “building and neighborhood” specific. There are buildings that have done an excellent job of working through the “new reality pricing” over these past two years, such as Jade Brickell, Brickell on the River, 1060 Brickell and Icon Brickell. The owners and or lenders of these buildings made the early tough decisions to sell at today’s values and it has lessened the pain. And equally as important, the positive sales in these buildings has helped the market to get back on track.
The average price per square foot for a Jade unit at the peak of the market in 2006 was $740 per foot, and by the end of 2009 was going for an average of $355 per square foot. In 2009, 71% of all sales at the Jade were either short sales or foreclosures. In these first five months of 2011, the average price has risen to $441 per sq ft, reflecting a gain in average value per sq ft since 2009 of 24%. It’s the same well-built building with views looking out across Biscayne Bay, but now at market prices. Quality buildings in locations like many in the Brickell area will continue to enjoy a rebound of buyer confidence and value.
We are telling our buyers to take things literally one building at a time. The disparity is quite compelling. The good news is that the number of units being sold is record-setting in 2011. We are reducing the inventory faster than anyone believed would happen just one year ago.
A recent study by the Miami Downtown Development Authority (DDA) does a good job of outlining what’s really happening within the Downtown/Brickell condo market.
Also, according to the U.S. Bureau of Labor Statistics latest report the Consumer Price Index was up four points in April.
How is the Miami condo market looking overall right now? –
If you are a buyer, it looks fantastic. However, two-thirds of our industry sales are still foreclosures and short sales. This large percentage of distressed sales will continue to keep pressure on pricing until buyers feel more confident that the backlog of these properties has decreased. Today’s values are unprecedented and opportunities abound. Most of the dramatic upswing in the number of sales over these past 24 months has been fueled by our international friends and neighbors, but our locals are now getting into the mix, as well.
Linked to the increase in sales has also been an explosion in the rental market in the Downtown/Brickell markets. I believe that the young professionals who have been taking advantage of the low rental rates will eventually begin to purchase — once they feel confident that values have stabilized. We’ve seen a little of that already, and I’m confident we’ll see more.
The entire world wants what we have to offer. We have buyers from literally dozens of countries buying condos in Miami today. That gives us a truly unique advantage. We’ve spoken about the “shadow market,” referring to foreclosures. We now also have the “shadow buyer,” the individual who comes to Miami as a tourist and decides to purchase a second home or investment property once they realize the unbelievable values that are available.
Click here for information on units available at Jade on Brickell.