Luxury condo sales on the rise in Miami-Dade, but inventory still growingApril 26, 2018
Luxury condos aren’t flying off the shelves, but the pace of sales is up in Miami-Dade County, according to a new analysis of MLS data.
Sales of condos priced $1 million and above increased 47 percent year-over-year from December to the end of February, a report by EWM Realty International shows. That does not include the pipeline of new development.
Luxury condos that sold between December and February were also selling for 84 percent of the original listing price, which shows that condos are trading at a discount. “I think the gap will get bigger. We still have a lot of properties that are overpriced,” said Ron Shuffield, president of EWM.
But despite the uptick, the county still has about 41 months of luxury condo inventory. A healthy market has just six months of supply, and Shuffield said the preferred range for luxury units is between 12 and 18 months.
“I don’t care what measuring sticks you’re using. It’s just too much inventory,” he said. Between February 2017 and February of this year, the supply of luxury units grew by 7 percent to 2,857, according to EWM’s study.
On average, luxury condos spent 200 days on the market during the three-month period, 11 percent more than the year before. The median price also fell 5 percent to $1.5 million.
In March, 63 luxury units sold in as of Wednesday, with more projected to close by the end of the month. But that number may fall short of the previous year. In March 2017, 91 units closed, marking the highest selling month of the year.
Shuffield expects sellers will continue reducing their prices to meet buyers’ expectations.
Developers have also been forced to do the same and wait longer for units to sell thanks to the slowdown, which began between late 2015 and early 2016. As they wait for inventory to get absorbed, they’re also working on plans for the next cycle by assembling their teams, hiring top architects and attorneys, and surveying industry leaders.