Brickell condo sale prices up 18% in 2 years
By Marilyn Bowden
The cost of condos on Brickell has been rising steadily over the past couple of years, but they're still seen as bargains, brokers say, particularly among the foreign investors whose cash purchases continue to buoy up the market.
"Condos are moving," said Carlos Villanueva, district sales manager for The Keyes Co. "What happened is that increasing affordability three years ago combined with a significant level of inventory, and that made purchasing a condo more attractive."
Buyers rushing to grab units at bargain prices pushed up demand, he said, "and the increased demand drove a significant reduction in inventory over the past three years, raising the average price per square foot by almost 20%."
Between 2009 and 2010, Mr. Villanueva said, the average price per square foot for all Brickell condos rose $13, from $244 to $257. From the end of 2010 till now, those prices have gone up another $31 to $288 a square foot.
Chris Basick, managing broker in Esslinger Wooten Maxwell's Brickell office, said it's hard to get up-to-date information about sales in new buildings because they aren't listed in the multiple listings service and it can take up to nine months for developer sales to be recorded in public records.
Looking at resale activity only, he said, the average price per square foot today in Brickell is $265. A year ago, it was $235.
Mr. Basick attributed the hike to a deep drop in inventory during the past year — from 17 months' supply a year ago to 10 months now, which is close to a balanced market.
"With less inventory," he said, "prices tend to go up. But they are still good values." Due to continued high restrictions on financing, making it tough for most people to get a mortgage, Mr. Basick said most buyers tend to be foreign nationals looking for units they can offer as rentals.
"They're hoping it will appreciate further while they're getting a better return than they could get in the stock market," he said.
New condos at the top of the market in the downtown-Brickell area are now selling for $425 to $430 a square foot, said Alicia Cervera Lamadrid, managing partner of Cervera Real Estate.
"Inventory is being sold out very quickly in these buildings," she said. "New second-tier units — those that are not on the water or have smaller units — will be released at about $330 to $340 a square foot."
Prices have been appreciating slowly but steadily all year, she said, as has absorption. Of the 23,000 new units that were built during the boom in downtown-Brickell, she said, fewer than 1,500 remain unsold.
"What's interesting," Ms. Lamadrid said, "is that for the most part, all the inventory that closed from 2009 to the present has been closed without any significant financing. So there is no shadow market in Brickell.
"Occupancy is super-high, about 90%, and rents are going up steadily. Miami is now a city that is very much under-leveraged."
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