Condos' share of sales surges to record levels in Miami
By Marilyn Bowden
Sales of condos surged to 63% of total home sales over the past three months, the highest share so far recorded in Miami-Dade County.
"From December 2010 through February 2011, we averaged 2,261 sales a month," said Ron Shuffield, president of Esslinger Wooten Maxwell Realtors, also known as EWM. Of those, he said, 846 were single-family homes and 1,415 were condos.
Over the same period the year before, sales averaged 1,656 a month, Mr. Shuffield said, of which 940, or 57%, were condos.
In February 2011 alone, said Mike Pappas, CEO & president of The Keyes Co., 1,722 condos and 1,095 single-family homes sold, giving condos 61% of the pie.
"Basically," he said, "we're now looking at a 60/40 spread."
Realtors cite several reasons for the condo market's gains, some of them temporary.
"The larger percentage of sold condos this past quarter is reflective of our large number of international buyers, as well as the great values that all buyers are finding in the foreclosure and short-sale inventories," Mr. Shuffield said.
"I think that will temper back somewhat when we get through the surplus."
Rita Regev, a broker-associate with Optimar International Realty, said investors looking for deals "drive a large part of the condo market. Last year we saw an incredible increase in bulk purchases by conglomerates."
Across South Florida, she said, sales of single-family homes increased 13.6% year over year from February 2010 through February 2011 — but condo sales climbed 29%.
"I attribute this to the condo-market investors," Ms. Regev said. "Condos are more attractive for investors because they have less exposure. There's onsite maintenance, so they don't have to hire a pool guy or landscapers or worry about vandalism. It's easier to rent a condo than a house, and less costly to renovate it."
More permanent factors are at play as well, Mr. Pappas said. "There's no question that we've run out of land and gone vertical in Miami-Dade," he said, and with a population of 2.5 million, condos will continue to dominate.
"There's more product," Mr. Pappas said, "and they're more affordable.
"In fourth-quarter 2010, the median price for condos was as low as $92,000; for a single-family home, it was $170,000."
The numbers are artificially low, he said, because 62% of home sales and 70% of condo sales were distressed properties.
Demographics also play a role, Mr. Pappas said: single women are the fastest-growing homebuyer segment across the US.
"Condos offer safety and a maintenance-free lifestyle," he said.
"Baby boomers, young retirees and empty nesters prefer a "lock & go' lifestyle," Ms, Regev said, "and the amenities are also a big attraction."
While their parents fled urban areas for houses in the suburbs, Mr. Pappas said Generation Y buyers — now in their late 20s and early 30s — prefer an urban lifestyle.
"With gas at $4 a gallon and hour-long commutes from the suburbs," he said, "people want the convenience of walking to restaurants and parks."
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