What’s going on in the Miami Real Estate market? Is a question I get often. So I decided as I was preparing another mail-out that I would go into detail about the sales activity for one of the condos that I follow, Murano Grande located at 400 Alton Road in Miami Beach’s most exclusive neighborhood for condos, South of Fifth.
A little background on the area first. South of Fifth has become one of the most exclusive areas in all of Miami located on the Southern-most tip of Miami Beach. One of the main reasons is location, location, location. It is surrounded by water on three sides, Biscayne Bay to the West, Atlantic Ocean to East and the Government Cut channel on the South which connects Biscayne Bay to the ocean thus allowing most high rises in the area to have amazing views, and one of the main reasons you will find some of the best Miami Beach condos here. Some of the most luxurious and exclusive condos in South of Fifth include Apogee South Beach, Continuum North and South Towers, Glass Condo, One Ocean, Portofino Tower, Icon South Beach, Murano Grande, Murano at Portofino, Ocean House and 321 Ocean. If you want more info about these condos you can click here to visit my main site.
South of Fifth is not only known for its magnificent and peaceful location but it is also home to world-famous restaurants, top-notch beaches, and gorgeous parks. One of the oldest and most popular restaurants is the world-renowned Joe’s Stone Crab which has been in business since 1913. Other famous area restaurants include Prime 112, Estiatorio Milos – Miami and Smith and Wollenksky. Another nice thing about South of Fifth is that there is not much commercial development which helps make it a great residential area and thus escaping most tourists radars and adding to the appeal and exclusivity of South of Fifth.
Ok, that was a little bit about the area now back to the sales data.
I compile sales data for Miami Beach Condos, and this was one of my most recent postcards. I thought I would take the opportunity to go into details regarding the sales data I had just compiled as I felt it was a good indication of the Miami Real Estate market in general. I have a degree in Finance so yes I enjoy sales data… putting it together and then analyzing. 😃
Here are the postcards I created, and then below I will go into details on the sales data…
The postcards above list the Closed Sales for Murano Grande located at 400 Alton Road which is one of the premier condo buildings in one of the best areas in Miami Beach – South of Fifth. The first postcard is for the 1st Half of 2017, and the next one is for the 1st Half of 2018.
The first thing that jumped out to me was the Decrease in the Number of Sales:
1st half of 2017 = 11 vs 1st half of 2018 = 6
That’s almost half the number of sales for the same time period. 😮
This could be a cause for concern but we will have to wait and see what the 2nd half of 2018 brings. My theory right now is that a lot of would be buyers for Murano Grande have bought or prefer to buy new construction units especially given the fact the there have been thousands of new units delivered over the same time period and at lower pricing. Most of these new construction units have been delivered nearby on the other side of the causeway in areas of Miami known as Brickell, Downtown Miami and Edgewater. Some of these projects are also located on Biscayne Bay so it does give Buyers a chance to have direct water views in a new building which some people prefer even if it means not being on Miami Beach.
I also noticed that in 2018 there has been a huge increase in Average Days on Market for East facing units and also for lower floor units with obstructed views.
Let me explain… Murano Grande is positioned right in front of Biscayne Bay (see image to the right showing Murano Grande) so the West facing units have the most desirable view, Direct-Water overlooking Biscayne Bay and depending on what floor you are on you can also see Downtown Miami which is why there is a premium for these units. With the East facing units you get a city view and while you do get to see the ocean it’s a few blocks away. The good thing is that you only have a few low-rise buildings in between you and the ocean but you will need to be on a higher floor to really get a great view, I would say from the 15th floor and above.
Most people just look at the Sales Price and Price per Square Foot, but I always say there is more behind the numbers. Let’s examine:
The Increase in the Days on Market:
1st half of 2018 = 621 vs 1st half of 2017 = 373
That’s an increase of almost 70% for the # of Days on Market. 😮
SIX HUNDRED AND TWENTY ONE DAYS!!! That’s almost TWO YEARS to sell. Most people would look at this and be concerned but what I see is something different. Let’s dive a little deeper…
I wanted to know why are they taking so long to sell. Murano Grande is a premier building in a premier location. SO what I found was that if you look at the Original Sales Prices of the (4) units that closed you will notice that all started on the market at or close to $1.3 million but all of them ended up selling for just under $1.0 million and one even sold for under $900,000 at $860,000. This tells me two things… Yes, prices have come down but more importantly is that there seems to be stability, a floor, at these sales prices just under $1.0 million. It’s clear to see that if you want to sell your East-facing unit or a lower floor unit with no clear view you must list it right below $1.0 million. If you do that you give yourself a high chance to sell your condo and in a much shorter amount of time which also helps keep the flow of sales moving and lowers inventory. Please keep in mind this does not apply to every single East-facing unit or lower floor unit without a clear view. If you have a really high-floor unit and/or your unit has been “recently” completely updated then you will be in a better position as far as pricing.
Another interesting note, is that the West facing units (Premier units) seem to have found their rhythm as far as Average Price per Square Foot. In both time periods they are averaging close to $1,200/sqft, which is a great sign while at the same time the Average Days on Market has held steady at around 225 days to sell or about 6-7 months. This is also a great sign and clearly shows that buyers are willing to pay a premium for the best condo units in the building. If you look at the Price per Square foot of West-facing units vs East-facing and lower floor units they are selling for almost double, $1,200 versus $600/sqft.
Price per Square Foot – 1st Half of 2017:
West View (Premium Units) = $1,197 vs East View = $656
Price per Square Foot – 1st Half of 2018:
West View (Premium Units) = $1,279 vs East View = $602
Ok folks, I hope this helps. Even though this is not the answer for the whole Miami Real Estate market, I truly believe it depicts a picture of whats going on in general especially with condos. Which is the following:
- Yes, prices have come down but at different levels for different product
- Buyers will pay a premium for Direct Water views
- If you are priced within comparable sales you will sell
- If you are overpriced you will not sell
- As more new-condo inventory comes on the market it will take longer for you to sell
Let’s see what the rest of 2018 brings. I of course am watching closely and will let you know how it continues. Feel free to scroll around this blog and the main site, www.JoseLayaRE.com and please check back often. Thank you!
Disclaimer: the opinions and views expressed here are those of the author and do not represent any entity whatsoever with which I am now or will be affiliated. All material presented herein is intended for informational purposes only, and is compiled from sources deemed reliable but is subject to errors and/or omissions.