Archives

Advertisement
The Newspaper for the Future of Miami
Connect with us:
  • Facebook
  • Twitter
  • Google Plus
  • Linkedin
Front Page » Top Stories » Investor Demand Surge Sends Brickell Condo Prices Soaring

Investor Demand Surge Sends Brickell Condo Prices Soaring

www.miamitodaynews.com
Advertisement

Written by on February 9, 2012

By Marilyn Bowden
Investor demand is driving up sale prices on Brickell condos.

According to statistics compiled by Esslinger Wooten Maxwell Realtors, or EWM, the average price per square foot in the fourth quarter of 2009 was $245.54. A year later, it hadn’t changed much; the average was $245.22. In the fourth quarter of 2011, however, that figure climbed to $285.46.

"What’s interesting," said Patrick O’Connell, interim manager of EWM’s Mary Brickell Village office, "is that between 2009 and 2010, inventory increased about 25% in the Brickell area, and at the same time the number of sales also increased 25%. So there was an almost perfect level of increase and absorption."

Because the large influx of inventory was balanced by an equivalent increase in demand, he said, the price per square foot remained the same.

But from 2010-’11, "it was a much better picture," Mr. O’Connell said. "Inventory dropped by 40%, sales increased by a little over 8%, and suddenly the price per square foot rose by 16.41%."

In December 2010, said Lisa Thomson, an associate on The Thomson Team at Coldwell Banker, "there were 349 new listings in the market. This past December, there are only 249 — but the number of sales were the same."

As a result, she said, the average asking price, which was $486,000 last year, is now $583,000 — and the average sold price has gone up from $279,000 to $352,000.

Behind much this success, both brokers say, is Brickell’s attraction to investors.

"Maybe 70% of the units go to investors," Ms. Thomson says. "They want a place where they can vacation and then sell when prices are better."

"There’s tremendous demand from overseas, and a lot are paying cash," Mr. O’Connell said. "Financing is difficult in some of these buildings, but that doesn’t affect our ability to sell them to foreign investors who want to rent them out.

"Right now, the rental market continues to improve, and tenants are making offers on rentals sight unseen."

As rents continue to escalate, Ms. Thomson said, some renters are converting to buyers. She said interest is also heating up among other domestic buyers.

"A lot of people are pulling money out of the stock market now and putting it in real estate," Ms. Thomson said. "Attorneys and financial advisors from New York are looking for condos from $200,000-$300,000, but there’s not a lot of them. If you want a building with a stable homeowners’ association, you’ve got to go up to around $400,000.

"Hedge funds are also buying units up. You can’t beat the return on your money from real estate right now."

The big question remains the number of repossessed bank properties still to be released.

"There are a lot of properties still in short-sale status that have not been released," Ms. Thomson said, "so it’s almost a false perception to say the market is going up. I think it will go down again when they come out."

Mr. O’Connell said if these distressed properties continue to come out in dribs and drabs, the market should not be unduly affected.

"Every one gets multiple offers right away — four or five buyers for each one of those REOs coming on the market," he said. "Without a lot of new buildings coming out of the ground, we should continue to see condo prices edge up over the next 12 months. It will not be a significant increase, but the trend will continue."

www.miamitodaynews.com
Advertisement
CLOSE X