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Miami leads Condo Market
by: Candy
May 19, 2006
Miami has really stolen the new condominium market in South Florida from Broward and Palm Beach counties.
It used to be that Palm Beach and Broward ruled the new condo markets. For example, in 1981 (peak of the cycle during that time), 16,301 new units sold in the northern two counties combined vs. 8,496 in Miami-Dade County alone.
Last year, in contrast, 1,152 new units sold in Broward and Palm Beach vs. 4,765 in Miami-Dade. That's right 16,301 Broward and Palm Beach new units sold in 1981 and just a measly 1,152 new sales last year.
Nowhere is this turnaround more obvious than in the luxury condo market. The waterfront areas of Miami from Aventura to Key Biscayne are filled with close to 40 new high rise developments. Furthermore, the majority have sold well and continue to do so. Only a handful of new projects are under construction in each of Broward and Palm Beach counties. Last year in Miami-Dade, 2,101 luxury units were closed vs. 428 in Broward and just 155 in Palm Beach.
How did this turnaround happen? Retiree condo markets (mostly suburban) dried up considerably in Broward and Palm Beach during the 1980s and developers did not seek out replacement markets. Too many suburban units were built, making such projects not feasible to develop until recently.
The luxury condominium market shifted to Miami-Dade because foreign buyers (about 50 percent of the market) prefer it there. Vacant land for luxury projects have been more plentiful in Miami-Dade as well.
Suburban condo markets catering to first-time home buyers have been cultivated in Miami-Dade particularly in areas including Hialeah, Doral and West Dade. But these markets in Broward and Palm Beach have essentially been ignored for at least 10 years.
Meanwhile in Miami-Dade, the 300 acres of vacant waterfront land that existed in the early 1990s has dwindled considerably. Miami-Dade luxury sites will become even more valuable because the largest percentage of future potential luxury buyers want to be in Miami. But it is also true that Broward and Palm Beach will yield plenty of buyers for luxury units as long as good sites are assembled.
During the first seven months of this year, the top 10 developers in Miami-Dade have enjoyed near-record earnings. The leader, with an average price of $982,756, is Towers at Porto Vito in Aventura. The leader in each of the three counties is developing luxury product. In Broward, the leader is Renaissance of the Ocean on Hollywood Beach with an average price of $449,976 and in Palm Beach, Toscana North on Highland Beach with an average price of $641,543.
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