Well, let me start of by saying that this unit is a short sale and is currently already in contract. It has been on the market for over a year. Basically, it would appear that the seller accepted an offer quite some time ago, but they are still trying to negotiate with the bank which can take an extremely long time.
As for pricing, well, there is quite a bit of inventory in South Beach and properties are staying on the market a long time. However, on a short sale usually the asking price is irrelevant because it is up to the bank to determine what they are willing to take even if a seller accepts an offer. Often, agents will put short sale homes on the market at an unrealistic low price to get attention. So, the listing price only really holds weight if the listing agent go it pre approved by the bank.
The least expensive comparable sale I saw at 88 King sold in March of 09 and was 1447 sq. ft, 2bd/2.5ba which is 538 per sq. ft. The sales price for the area is around $765 per sq. ft. At a price of 799k for the unit you are interested in the price per square foot would be $523 per sq. ft. which is not that far away from the other unit that sold. I do believe that #117 is in a little better shape and also includes a patio, which the previous sale did not. So, without having the details of the situation and strictly by the numbers, 799k is possible, but not likely. A solid negotiator always help though!
If you have any questions or would like a more comprehensive analysis please feel free to contact me at firstname.lastname@example.org or 415 728 5580. I'm very familiar with South Beach and would love to help you out.
While the property is in contract now, it's possible that the lender will refuse the contracted amount, or the buyer will get tired of waiting and walk. The property could become available again. In a worst case scenario, the listing agent and lender are never able to conclude negotiations and the property goes to auction (you don't want that to happen-- auctions are tricky to navigate, and have high risks for bidders who don't precisely know what they're doing).
I remember the unit from when it was marketed. You have tons of square footage and the patio is a big plus, and you're on the more private side of the building (the 2nd Street side patios have a lot more street exposure). With some spit and polish, this place could be a real showcase.
Let me know if you have more questions about short sales or other Mission Bay/South Beach properties. You can also check out my listing right down the street at 188 King, #307. Very different from 88 King, but still an interesting property-- also a short sale.