Early indications are the unanswered questions about contaminated soil discovered in — and potentially around — Coconut Grove parks could be slowing down the Miami neighborhood’s real estate market.
Resales of single-family houses, condos, and townhouses in the wealthy Coconut Grove enclave of Miami have slowed by more than 40 percent since early September when news first surfaced that soil laced with “lead, arsenic and other toxic substances” had been found in at least two pristine neighborhood parks, Blanche and Merrie Christmas.
It is unclear if the subsequent series of public meetings and articles by the Miami Herald, New York Times and other publications have triggered the slowdown in transactions — albeit, it has only been less than two months — in the Coconut Grove housing market, as real estate deals typically take weeks to complete.
What is clear is that Coconut Grove residents — including Miami Commissioner Marc Sarnoff, who reportedly lives across the street from one of the contaminated parks — are anxious for answers about how to protect their families from parks filled with “concentrations of dioxins, arsenic, barium, lead, copper and antimony,” according to the Miami Herald.
Reacting to public fear and outrage about not divulging details soon enough, Miami officials have since taken several dramatic steps such as paving soil with blacktop, laying artificial turf over potentially troubled spots, and shutting an entire park in hopes of neutralizing the situation until further scientific tests can be completed to assess — and recommend ways to remediate — the contamination levels at the city’s 112 parks.
As the situation evolves, buyers have slowed their residential acquisitions in Coconut Grove, purchasing an average of less than eight single-family houses monthly since early September when news of the toxic parks first surfaced in media reports.
In comparison, buyers had purchased an average of 13 single-family houses in Coconut Grove every 30 days between January and August of this year, according to the Southeast Florida MLXchange.
Sellers are likely to argue the recent slowdown in single-family house resales in Coconut Grove has have more to do with recent price increases than buyer concerns about contaminated parks.
After all, the median transaction price for a Coconut Grove house jumped to about $367 per square foot since September. Before the contamination news, buyers paid a median transaction price of less than $335 per square foot for a Coconut Grove house between January and August of this year, according to the data.
It is worth noting at least 17 single-family houses in Coconut Grove are currently under contract — at a median asking price of $275 per square foot — to be sold but have not yet transacted, according to the data.
Additionally, more than 60 single-family houses in Coconut Grove are on the resale market at a median price of nearly $455 per square foot. At the current resale transaction pace of less than eight houses every 30 days, Coconut Grove has nearly eight months of available inventory.
A healthy real estate market typically has about six months of available inventory. Any additional inventory represents a buyer’s market and any less suggests a seller’s market.
The situation is just as unpredictable for the Coconut Grove condominium and townhouse market.
Resales of condos and townhouses have slipped to an average of nine transactions monthly since September compared to an average of 16 deals monthly in the first eight months of this year.
Nearly 95 condos and townhouses are currently on the resale market, representing about 10 months of available inventory at the current transaction pace.
An additional 40 condos and townhouses are currently under contract — at a median asking price of about $228 per square foot — waiting to transact, according to the data.
Peter Zalewski is a principal with the Miami real estate consultancy Condo Vultures. Zalewski, a licensed Florida real estate professional since 1995 and founder of CVR Realty and Condo Vultures Realty LLC, advises developers, lenders and institutional investors. Zalewski also runs the preconstruction condo project website CraneSpotters.com in conjunction with the Miami Association Of Realtors.