Miami: Confusion and the Plummeting Condo Market
Condo sales in Miami have seen better days. The city is inundated with unsellable condos, yet prices are showing an increase on published listings by the Miami Association of Realtors.
To be precise, sales are down 25 percent from February 2014 and inventory is up by 93 percent since early 2013. One would expect, with such a supply and demand imbalance that the price of area condos would be plummeting as well, but according to the Miami Association of Realtors, condo prices increased 6.3 percent.
Here are a few key points from Business Insider as to why condo sales are down in Miami-Dade County:
- The strengthening dollar makes real estate more expensive for foreign purchasers. Miami is an international hub in which foreign investment plays a vital role in the real estate market.
- The change in pricing momentum could be making prospective purchasers wary of new real estate investments.
- New supply from the preconstruction condo boom is running into trouble due to competition with existing condos.
- A surge in resale inventory.
Why aren't the price declines showing up in the median prices published by the Miami Association of Realtors? Business Insider says:
"The realtor’s aggregate data is flawed because from 2009-2016 the data was full of sub $150k sales of bombed-out foreclosure borderline worthless properties – and those properties have worked their way through the system and are the weak comps that make the reported year-over-year average or median gains “true” but entirely meaningless."
Essentially gains in numbers are insignificant because the data from the prior year was "pushed down by nearly worthless foreclosed old condos working their way through the process."
This not good for realtors who have to explain to their clients why the listing price of their unit is up seven percent but in actuality, it's really down 20 percent. Many prospective sellers cannot wait three to five years to sell a home. With this being the case for most, sellers are left with lowering their price point significantly on order to close the deal.
For more on what's happening with the Miami-Dade County condo market, click the link to read the Business Insider article: https://ow.ly/o18130aLsRP
Are you a Miami-Dade County resident who recently sold or will in the near future sell a condo? Tell us a little about your experience in the comments section below.