That market currently has about two years of excess luxury condominium inventory, according to a new report from Condo Vultures Realty.
During the first half of this year, 39 units sold in the three cities, meaning an absorption rate of less than seven units per month, according to the report. But nearly 245 luxury units are listed for sale. The report defines luxury as units asking $1 million and up, and excludes the pipeline of preconstruction units.
Six months of supply generally makes for a balanced market. Anything over that suggests a buyer’s market, while years of excess supply suggest developers and sellers will be sitting on product for a long time.
About 15 units in Bal Harbour, Surfside and Bay Harbor Islands are under contract for an average price of $3.6 million, or $1,261 per square foot. Meanwhile, asking prices averaged $4.1 million, or $1,411 per square foot.
From January to June, the average closing price of a condo in those cities was $2.9 million, or $937 per square foot, which is 40 percent lower than the average asking price. Units took nearly eight months, or 233 days, to sell in the first half of the year while units are now spending 206 days on the market, according to Condo Vultures’ analysis of MLS data.
Eight condo projects are under construction in the area, which will add nearly 300 units to the market. Since the beginning of the cycle in 2011, developers have completed 15 projects and 832 units in Bal Harbour, Surfside and Bay Harbor Islands. Finished projects include the Four Seasons Residences at The Surf Club, Fendi Château Residences, Oceana Bal Harbour and Bay Harbor Club Condominium.
Another seven developments totaling 298 units have been approved and seven more with 268 units have been proposed, according to Condo Vultures. That means nearly 1,700 condos are in the pipeline since 2011.