Miami’s infatuation with the newest thing seems to be taking a toll on resales of condos.
As new condominium construction hit its stride, August sales of existing condos in Miami-Dade County plunged 21.4 percent from a year earlier to 1,252 closings, the Miami Association of Realtors said.
That is the latest sign that new condo construction is eating into condo resales, according to the Realtors group.
Miami-Dade condo resales in August dipped to their lowest level since February and were down 10.8 percent from July, the Miami Realtors said.
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With demand slackening, the median price of an existing condo in Miami-Dade fell 4.2 percent to $182,000 and also was down 4.2 percent from July, Miami Realtors said.
“There’s more candy in the candy store. Miami may be the only city where people think 10-years-old is old,” said Jon Mann, an agent who oversees Coldwell Banker’s office in Brickell. “In Miami, people want the new, new thing.”
Newer and updated apartments that have good views and attractive floor plans continue to sell briskly, Realtors say. But more outdated units with less appealing views and those in need of remodeling are sitting on the market.
“A lot of buyers want something that is new and nice — and they’re willing to pay a premium,” said Eli Montag, a Coldwell Banker agent. “It’s still an active market. Anything that’s nice and priced right is moving quickly.”
New construction condo projects — despite stiff competition and spiraling prices — continue to sell. According to Cranespotters.com, which tracks South Florida’s preconstruction condo market, 77 new condo projects with 91 towers are in the works east of I-95 in Miami-Dade. So far, two thirds of 14,140 units involved have been presold.
Slack in demand for existing condos is also evident in Broward County. Condominium and townhouse resales dropped 9.1 percent to 1,382 closings in August from 1,520 a year earlier and were down 2.7 percent from July, according to the Greater Fort Lauderdale Realtors.
The median price for a Broward condo inched up 1.7 percent to $120,000 in August from a year earlier, which was 6.3 percent below July.
Another headwind for South Florida’s housing market is a continuing pullback by investors, who have played a pivotal role in the region’s rebound from the big crash. Cash sales, which often signal investor involvement, are down in both counties.
With prices marching steadily higher for three years now, many investors are finding fewer financially sound opportunities to buy and rent condos and houses.
Realtors say the decline in investors is part of the reason sales of South Florida single-family homes also slowed in August. In Miami-Dade, sales of existing single-family homes fell 4.4 percent to 1,157 closings in August, and were down 5.9 percent from July. In Broward, sales of existing single-family homes fell 6.8 percent in August from a year earlier to 1,295 closings and were down 18.2 percent from July, the Greater Fort Lauderdale Realtors said.
Gone are the double-digit gains in median prices. The median price for a single-family home in Miami-Dade rose 6.4 percent to $250,000 in August from a year earlier. While that marks a healthy gain, it’s slower than last year’s heady price increases. The median price for a single-family home rose 2.3 percent from July.
In Broward, the median price of a single-family home rose 7 percent to $290,000 in August from a year earlier — a solid increase, to be sure, but far from the 26.1 percent year-over-year gain posted in August 2013. The median price of a single-family home in Broward inched up 1.8 percent from July.
The slowdown in South Florida’s housing market in August echoes broader trends. Nationwide home sales fell 1.8 percent to a seasonally adjusted 5.05 million units in August, according to the National Association of Realtors, which cited a retreat by investors paying cash. Florida condo sales fell 8.8 percent in August from a year earlier, while single-family home sales rose 4.2 percent from a year earlier, Florida Realtors said.
In South Florida, homes typically are sitting on the market longer than last year. In August, Miami-Dade condos, for instance, sold at a median pace of 53 days on the market, up from 46 days a year earlier.
Rising inventories of homes and condos listed for sale gave buyers more options and strengthened their hands in negotiating with sellers.
Miami-Dade’s supply of existing condos rose to eight months in August — or eight times the number of homes sold in a month — compared with a six-month supply a year earlier.
The number of Miami-Dade single-family homes listed for sale remained relatively tight, with a 5.7-month supply in August, up 16 percent from a year earlier.
Experts generally consider a six-month supply — or six times the number of homes sold in a month — to be a balanced market between buyers and sellers, with more than that tipping the balance toward buyers and less than that favoring sellers.
In August, Broward had 5.8 months of supply of condos for sale and 5.1 month supply of single-family homes for sale.
On average, Miami-Dade existing condos fetched 94.7 percent of the original list price in August, down from 97.2 percent a year earlier, Miami Realtors said.