3,546 unsold Brickell condos make up 51% of Miami-Dade County's total
By Marilyn Bowden
About 18% of Brickell's condos are on the market, reports show, but brokers say units are moving and once the financing logjam breaks the market should reach normal levels quickly.
In the recent building boom, 10,402 units in 32 new buildings were added to the Brickell market, according to the Miami Downtown Development Authority's "Residential Closing and Occupancy Study" released this month.
Of those, 66%, or 6,856 units, have closed, leaving 3,546 completed but unsold new units, which is 51% of the countywide total.
"The interesting part of the inventory story," said Patrick O'Connell, a senior vice president at EWM, "is that most of the remaining units are concentrated in a few buildings, most notably Icon, Infinity and Mynt. Many of the buildings on and off Brickell have a relatively small inventory of unsold units."
In the area's resale market, according to condoreports.com, 746 units are for sale. A further 293 are for rent, which could indicate that their owners intend to put them on the market when pricing improves.
"There are really two markets in Brickell, as in most areas," said Christian Kawas, a Realtor-associate with Douglas Elliman Florida, "the under $500,000 market and the over $500,000 market."
The pace of Brickell condo sales in the over $500,000 market — about 20 a month — represents a 16-month supply, he said, but the absorption rate for resale units in the under $500,000 category, which accounts for more than two-thirds of the inventory, is about 70 per month.
"That's only about 9.5 months of inventory," Mr. Kawas said. "At eight to nine months, we call it a seller's market. So we've come a long way in the past 18 months."
In the under $300,000 category, he said, very little inventory remains.
"We've had buyers from Tokyo and Israel who don't even see the property before closing."
Peter Zalewski, principal of Condo Vultures, which specializes in bulk sales of developer units, said of the 23,000 newly built units in the Brickell/ downtown/ Biscayne corridor, 7,300 remained unsold at the end of 2009, down from 9,700 at the end of 2008.
"From what we've seen in the first quarter this year," he said, "we're expecting that number to jump down to about 6,500."
Buyers are still all-cash, Mr. Zalewski said, but are paying an increasingly higher price per square foot.
"Dwindling inventory is one thing forcing them to pay more than they may have thought they would," he said. "Also, there's anxious money out there that needs to be spent."
Across the tricounty area, Mr. Zalewski said, more than 20,000 pending sales were recorded in February 2010, a height that has not been approached since November 2008.
"The condo inventory is slowly being depleted," he said. "If it's not at the bottom, it's pretty close."