Good information is vital in assessing continuing condo boom
By Michael Lewis
It's hard to keep up with Miami's rapid changes - hard, but vital.
Last week, we noted that Wachovia Securities analysts nationally had raised a warning flag over Miami-Dade County's condo market because 19,660 units were just finished, under construction or in planning here. Even in a market like Miami's with strong outside demand, the analysts noted, that might be more than can be digested without a hiccup.
We also noted our concern that Wachovia was overly conservative in its estimate by listing a mere 739 condo units in the planning process throughout the county, a number that ignores projects that have been announced, are already being marketed and, barring a disaster of major proportions, will be completed.
Guess what? As of today, Wachovia will have to increase its estimate of condo units in our pipeline more than 25% by adding 5,051 units - and that's based on just five projects that we reported won governmental approvals in the intervening week.
Talk about a sizzling marketplace.
Brickell CitiCenter, destined to include Miami's tallest building, entered the approved projects list in a three-tower cluster on both sides of South Miami Avenue with 2,424 units. Icon Brickell, at 495 Brickell Ave., won city approval for three towers with 1,705 condos. Soleil, at 3100 Biscayne Blvd., won an okay for 288 condo units. Urban River won approval for two towers with 577 units in southeast Overtown. And Ehden Place won the okay for a 14-story tower with 57 units at 54 NW 27th Ave.
That's one week's worth of condo approvals in the City of Miami alone, and it probably isn't all-inclusive. We don't pretend to be able to keep up with each and every project in these go-go-condo days.
It certainly doesn't include Mile, which plans to build residences along Coral Way in Miami, because, as we also reported last week, the city just sent developers back for new plans - plans that again will swell the number of units in the planning pipeline.
While none of these is a surprise development - we included most in our own estimate of more than 40,000 units on the way in the City of Miami alone and well above 50,000 more for the county as a whole - all will increase the numbers in the cautionary report from Wachovia.
To our way of thinking, analysts of this sizzling housing market who ignore real projects that really will be built are far too conservative.
Those who for reasons of their own try to downplay warnings in the marketplace go both ways - they say there's no condo overcapacity problem, then state the reason is that most of the announced projects will never make it out of the ground, so the total in the pipeline is vastly overstated.
That's well and good for promoters - especially those promoting projects that are at or near completion who want to gloss over the chances of competitors. It's not so good for objective observers who are trying to provide rational advice to investors.
It's hard to keep pace with the rapidly changing market - but for those whose money is going to be on the line, it's vital.