Developers are on the verge of proposing more than 30,000 new condo units in Miami-Dade County east of Interstate 95 — plus the areas of Coconut Grove and Coral Gables — during this current real estate cycle that began in 2011.
As of late January, developers have already announced more than 205 new condo towers with nearly 29,800 units targeted to a combination of primary users, second-home buyers and investors, according to the preconstruction condo projects website CraneSpotters.com, a website operated by Condo Vultures‘ Peter Zalewski.
At the current proposal pace, developers should eclipse the 30,000 new unit milestone announced for Miami-Dade County sometime before the end of the first quarter of this year.
By comparison, developers created nearly 150 new condo towers with more than 34,000 units during the previous South Florida real estate cycle that began in 2003 in the popular markets of Greater Downtown Miami, South Beach and Sunny Isles Beach, according to an analysis of Miami-Dade County records.
The total number of new condo units developed in the entire Miami-Dade County area east of I-95 was not available.
In this latest South Florida real estate cycle, Miami-Dade County represents about 72 percent of the new condo units announced in the tricounty region.
In Miami-Dade County, Greater Downtown Miami is the most active preconstruction condo market with more than 70 new towers and nearly 19,200 units announced to date.
Sunny Isles Beach ranks as the second most active Miami-Dade County market with 19 towers and nearly 2,500 units, and Aventura is third with 13 new condo towers and more than 2,100 units announced.
Rounding out the top five most active Miami-Dade County preconstruction condo markets are Miami Beach, based on 35 new condo towers with nearly 1,500 units, and the Bal Harbour-Surfside-Bay Harbor Islands market with a combined 30 new towers and more than 1,300 units.
To the north, Broward County accounts for more than 19 percent of the preconstruction supply; 72 new condo towers with nearly 8,000 units have been announced to date.
Foreign buyers who are comfortable committing 50 percent deposits on preconstruction units have been the key factor in the high number of new condos proposed for Miami-Dade County, compared with the two neighboring counties to the north in South Florida, where domestic buyers are more active.
Reliable statistics that detail the number of international buyers purchasing preconstruction condos in South Florida are not readily available, but a glimpse at the latest Census data provides some insight into where foreign-born individuals tend to reside in the tricounty region.
More than 51 percent of the 2.6 million residents of Miami-Dade County are “foreign born,” compared with less than 32 percent of Broward County’s 1.8 million people and less than 23 percent of Palm Beach County’s nearly 1.4 million residents, according to 2013 government estimates.
The cultural affinity that many foreign expatriates, along with their family and friends, have for Miami-Dade County has undoubtedly been a contributing factor for this market’s speedy rebound from the last South Florida boom-bust period and the start of this new cycle.
Besides the notion of an easy transition, Miami-Dade County also benefited in recent times from what some industry watchers have said was a discounted condo market when compared to other international cities around the world.
Adding to this value proposition for buyers, the U.S. dollar was significantly weakened during the Great Recession of 2008 compared to other major international currencies, making Miami-Dade County condos even more attractive to foreign buyers.
This international demand for new units — combined with record high rents being paid by local tenants to out-of-town landlords — undoubtedly played a crucial factor in the latest condo building boom that is currently under way in Miami-Dade County.
Nearly 10 new condo towers with about 1,000 units have already been constructed, and an additional 68 buildings with more than 9,600 units were under construction in Miami-Dade County as of Jan. 27, according to CraneSpotters.com.
The unanswered question going forward is whether foreign buyers will have the same desire to own new Miami-Dade County condos in the future now that presale prices are rising and foreign currencies are falling against the dollar.
Peter Zalewski is a principal with the Miami real estate consultancy Condo Vultures. Zalewski advises developers, lenders and institutional investors. Zalewski also runs the preconstruction condo project website CraneSpotters.com in conjunction with the Miami Association Of Realtors.
COUNTY BREAKDOWN OF CURRENT SOUTH FLORIDA CONDO BOOM
This is a summary by county of the new condo towers announced for the tricounty South Florida region as of Jan. 27.
|Share of South Florida Units
Source: Miami Herald