As South Florida’s enters into the summer season, discounts on condominiums in the Vultures Database™ have leveled off or strengthened in 43 percent of the South Florida coastal markets being tracked by Condo Vultures® LLC.
The Vultures Database™ Report for April determined that 12 of the 28 condominium markets in South Florida being monitored experienced no change or even a slight strengthening in discounts through March 31, according to a new report from Condo Vultures®, a Bal Harbour, Fla.-based consultancy.
By comparison, the Vultures Database™ Report for March determined that discounts in eight condominium markets had leveled off or strengthened.
This means conditions in four additional South Florida markets have shifted from a status of falling to one of stabilization. Each of the markets is distinctly different but all share the common characteristics of being a popular destination for full-time residents of South Florida.
“It is too early to determine what this all means specifically,” said Peter Zalewski, a principal with Condo Vultures®. “That being said, it is probably not too farfetched to think that some of the discounts in specific South Florida markets are beginning to level off. Whether this strengthening in discounts is temporary or permanent will only be known with time.”
There are 4,293 properties in the Vultures Database™ with the typical property being reduced by an average of -27 percent off of the historical high asking price. The Vultures Database™ tracks South Florida properties east of I-95 from Palmetto Bay to West Palm Beach that have been reduced in asking price by at least 10 percent or $100,000 from the historical high amount.
Condominiums represent 70.4 percent of the total inventory, and single-family houses the remaining 29.6 percent, or 1,270 properties.
The average discount on a single-family house in the Vultures Database™ works out to a drop of -$337,303, according to the data.
The remaining 3,023 properties in the Vultures Database™ Report for April are condominiums distributed throughout 28 markets, with Fisher Island having the smallest discount of -19 percent and Palm Beach the largest discount at -34 percent.
The average discount for a condo in the Vultures Database™ in April is -27 percent, or -$174,765, off of the historical high asking price.
In the Vultures Database™ Report for March, there was an inventory of 3,015 condos that had an average discount of -26 percent, or -$172,601.
The 10 markets where the discounts have stabilized are Aventura (-28 percent), Bal Harbour (-22 percent), Coconut Grove (-26 percent), Eastern Shores (-25 percent), Fort Lauderdale (-27 percent), Hollywood (-28 percent), Palm Beach Gardens (-28 percent), South Miami (-27 percent), Surfside (-27 percent), and Wilton Manors (-29 percent).
Coral Gables (-25 percent) and Miami Shores (-28 percent) are the markets experiencing a strengthening in pricing, according to the data.
Despite the strengthening in pricing in some markets, the overall number of closings of properties in the Vultures Database™ is down slightly from last year.
In the three months of 2008, there have been 275 properties in the Vultures Database™ that have closed. This averages out to three transactions per calendar day. In 2007, there were 1,190 properties in the Vultures Database™ that sold throughout the year for an average of 3.3 transactions per calendar day.
On a month-by-month basis this year, there were 89 transactions in March, 94 transactions in February and 92 transactions in January. At this pace, there would be 1,095 transactions in 2008. Given the overall inventory in the Vultures Database™ and the current absorption rate, there is about a four-year inventory of product.
“The ongoing trend is that quality product priced at a discount is moving, and the inferior product just doesn’t move regardless of the reduction in pricing,” Zalewski said. “Generally speaking, this product is usually inferior product that tends to be given back to the lender because no one else will take it under these conditions.”
Lenders have taken back nearly 5,000 properties in the tri-county South Florida region in the first three months of 2008, which represents a 255 percent increase compared to 2007. Lenders in the region are on pace to repossess nearly 20,000 properties in Miami-Dade, Broward and Palm Beach counties, according to a recent report.
Guide: 55 percent of Central Business District Condos in Brickell Area
When this latest wave of condo construction finally winds down by the end of 2009, the Brickell Avenue area will account for 55 percent of the projects in Greater Miami's Central Business
District area, according to the Condo Vultures® Official Condo Buyers Guide to Miami – 2008.
Brickell Avenue has 86 of the 159 projects scattered in a 60 block stretch from the Rickenbacker Causeway north to the Julia Tuttle Causeway, from I-95 east to Biscayne Bay. The Biscayne Boulevard corridor has the second highest concentration of condominiums with 51 projects. Downtown Miami has 22 projects.
For more information on purchasing a copy of the Official Condo Buyers Guide, please call 800-750-0517 or send an email to inquiry@condovultures.com.
Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.
Copyright © 2008, Condo Vultures® LLC
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