An exciting announcement was recently made in South Florida – between May 2011 and today more than 200 new condo towers east of I-95 in Miami-Dade, Broward and Palm Beach counties have been scheduled to be built. Yes, this is no April Fool’s joke, you read that correctly. New condo buildings are being planned all across the tri-county area. A stabilizing and strengthening condo real estate market is creating a stir in the community with the hopes that South Florida is poised for a boom – but what do the statistics show us?
Cranespotters.com compiled and analyzed a significant amount of research to provide us with relevant data, and here is what they found: These approximate 200 new towers expect to produce 28,350 units. 28% of these proposed units are currently under construction or recently completed while the remaining 72% are still in the planning or presale phase. So, the question is, will our stabilizing market lead to the actual construction of these unbuilt towers and units or will this potential condo boom be a bust?
To answer this we must focus on market factors. Condo construction financing is still difficult to come by, so developers are largely dependent on buyer deposits, and of course, their own funds. Cranespotter hints that a reason for developers to have confidence in the market may be found in a burgeoning condo resale market looking for inventory. As of March 24, South Florida only had 24,500 available units on the MLXchange, which is less than six months of inventory. “A healthy real estate market has six months of resale inventory. Inventory levels below that represent a seller’s mark,” states Peter Zalewski, Principal at Condo Vultures LLC. Just five years ago, there were 61,000 condos available for resale in the tri-county area; so obviously, the pendulum has shifted and developers are poised to take advantage of this shift. Bullish developers and buyers are hoping for success and the timing may be just right.