Tuesday, September 4, 2012

High-End High Times

As I commented some three years ago that Biscayne blvd and downtown Miami would be the hong kong of the Americas, and the empty condos would not stay empty for long as the natural beauty of the area would draw people in along with the fact that it was in the usa. That was at a time when a lot of people said that the US was done and I argued that where else would you keep your money if you were a Russian or  Chinese billionaire certainly not in their native currencies. Aivars Lode

Is Miami-Dade County already experiencing another condo boom -- this time strictly in the luxury market?
During the first half of the year, some 400 condos worth at least $1 million each sold in just the resale market alone, according to CondoVultures.com.
That’s up 7.8% from the same time last year. Even more remarkably, the median per-square-foot price hit $699. Prices in the luxury market haven’t been near that number since 2007.
Eye-catching individual deals have accented the luxury boom, including the recent $25-million sale of a condo on South Beach and three sales of more than $10 million at the St. Regis Bal Harbour Residences.
Many buyers are foreign — from Latin America, Russia and Europe. For most, the units are investment properties or second homes.
“If I’m an investor, I can buy a new unit that was built during the boom … for a cheaper price than new construction,” says Peter Zalewski, principal of CondoVultures.com. He notes that there are 10 condo towers already under construction east of I-95 from Miami to northern Palm Beach County. Developers have proposed another 35, including one in South Beach with prices at about $1,500 per square foot.
Cash is king, too. Although Zalewski doesn’t have updated statistics, he says that a year ago, a CondoVultures study found some 80% of the condo transactions in the county were all cash. Plus, he notes, “there’s typically about a 15% to 20% premium that someone is likely to pay if their offer is based on financing.”
January-June Luxury Condo Resales (Miami-Dade)
YearUnits Sold% ChangeMedian Price Per Sq. Ft.% Change