As we move into the Fall of 2018, the overall Miami-Dade County real estate market is in good shape, according to a recent report by the Miami Association of Realtors. The total Miami-Dade County home sales surged 35.7 percent in Q3. This surge in sales was mostly in the Single-Family Homes sector of the market. Despite the this surge in the overall market, the Brickell luxury condominium market continues to stumble. The average resale price per square foot in Brickell fell to $392 per square foot from $405 per square foot at the end of 2017. One of the biggest obstacles for the sale of Brickell condominiums is the difficulty for buyers to obtain affordable financing. The lack of affordable financing coupled with cash investors stepping back from the market, has stalled the Miami Brickell condo market. This market shift is creating opportunities for buyers as sales prices decline. We will shed some light on this shift and what it means for buyers and sellers.
BRICKELL CONDO MARKET REPORT (33130 & 33131 Zip Codes)
As all signs continue to point downward for the Miami condo market, we are often asked the question, “How is the Miami Brickell Condo Real Estate Market?”. To provide educated answers to these questions, we rely on our analysis of various sources of market sales and economic data. The Vaughn Real Estate Group has researched the Southeast Florida Multiple Listing Service data and Zillow Research to deliver you up-to-date information about the Brickell condo market. Here are some market data highlights:
• Over 1850 Brickell condos were on the market at the end of Q3
• The current median sale price in Brickell is $360,000 (down $9000 from Q2).
• Days on Market is at about 5.5 Months or 167 days at the end of Q3.
The Brickell market continues to show evidence of slowing down as we see declining resale prices, inventory levels continue to swell with new high priced condos units flooding the market (mostly priced between $500,000 and $800,000). Zillow Research confirms the data showing that the Brickell market has declined another -1.4% over the last year, however they are predicting a 3.3% increase in the next year.
We continue to follow the market data because it answers the question “How is the Market?” The current market data implies that we are still in a buyer’s market for Miami Brickell condos and we expect to see this trend as more new condos enter the market in 2018-2019.
WHAT TO DO IN A BUYER’S MARKET?
For Buyers: Brickell condo prices are on the decline and are continuing to shift downwards. This may be a great time to buy. Keep in mind; you may need to factor in your income and current mortgage interest rates to gauge how much you can afford to buy. The good news is that condos in Miami are becoming more affordable, mostly due to the growing “generic” condo inventory. Most of these generic condos were purchased by investors with the intention of reselling them. These condo do not offer water views, unique features or high-end finishes. In this market, buyers have the upper hand, as it is not easy to sell these generic units and the investors do not like to sit on to these properties for too long. It is for this reason that the market is seeing high condo inventory levels.
For Sellers: Brickell condo prices are on the decline and you are in a downward shift. You may have to list your condo for a lower value than when the market is trending upward. However, if you price it competitively during this time, you could attract a lot of buyers’ attention and possibly spark a bidding war between your property (further driving up its value) — since buyers will be on the hunt during this shift in the market. Also keep in mind that we expect to see a growing condo inventory well into 2019, so buyers continue to have a plethora of condo units to choose from.
THE MIAMI CONDO MARKET AS A WHOLE
It is important to note that you should compare both the price values of condos and the inventory level of the market together. Typically in Miami, as the inventory decreases, condo prices go up. As the condo inventory increases, condo prices go down. Miami condos on the market continue to surge up with the current housing supply at around 32 months, up from 26 in late 2017. Developers are sitting on completed units that they are unable sell, and months’ supply in their projects has reached several years.
Also, there are external factors that are affecting the Miami real estate market. As mortgage rates continue to increase, buyers can afford to buy less. In addition, South Americans and Europeans historically make up a big percentage of the Miami condo buyers, and with the U.S dollar now stronger than most of these foreign currencies, these buyers have now backed away from the market. Foreign purchasers could also be chased off by the efforts of the Treasury Department’s Financial Crimes Enforcement Network which has Geographic Targeting Orders for hotspots of cash money laundering in real estate markets like Miami.
Miami Brickell condo market stats in this article are based off of the Miami, FL 33130 & 33131 zip codes.
Written by D. “Alex” Vaughn
Alex Vaughn, is a Broker Associate Realtor on The Vaughn Real Estate Team with Carrington Real Estate Services (US) LLC and specializes in helping first home buyers find condominiums and homes in the Greater Miami area. Alex is a highly experienced real estate consultant, offering end-to-end professional sales and leasing service.