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Coral Gables Quietly Emerges As A Top Performing Condo Market In South Florida

Peter Zalewski
Peter Zalewski

The real estate climate in the Miami suburb of Coral Gables is quietly emerging as one of the best performing condo and townhouse markets in all of South Florida.

This city of less than 50,000 people located to the west and south of Miami proper is statistically outpacing — on a per capita basis — nearly every coastal condo market east of Interstate 95 in the tricounty region of Miami-Dade, Broward and Palm Beach.

Currently, Coral Gables has fewer months of condo resales – about six months of inventory – available for purchase than practically any of the more publicized coastal areas in South Florida, according to an analysis of data from the Southeast Florida MLXchange.

A healthy condo market generally has about six months of inventory available for resale. More months of available inventory indicates a buyer’s market and less months suggests a seller’s market.

By comparison, the Greater Downtown Miami market currently has 13 months of condo resale inventory available for purchase. Sunny Isles Beach has 11 months of supply. The markets of Miami Beach and Downtown West Palm Beach each have nine months of condo resale inventory available. The markets of Hollywood-Hallandale Beach and Downtown Fort Lauderdale and the Beach each have at least seven months of supply for condo resales on the market.

Only the Boca Raton-Deerfield Beach market, with less than six months of available inventory for resale, is positioned as well as Coral Gables from a supply perspective.

Contributing to the perceived strength of the Coral Gables condo market is the fact that resale units are trading at some of the highest year-over-year price increases in all of coastal South Florida.

The average condo transaction in Coral Gables this year has increased by 22 percent to $323 per square foot in the first eight months of 2014. In the same period of 2013, pricing was $264 per square foot.

By comparison, the average year-over-year condo price increase during that same eight-month period was 19 percent in downtown West Palm Beach; 13 percent in Sunny Isles Beach; 12 percent in Miami Beach, downtown Fort Lauderdale and Beach; 11 percent in greater downtown Miami. In the Boca Raton-Deerfield Beach market, the sales price dropped by 21 percent.

The only market to outperform Coral Gables was Hollywood-Hallandale Beach, which experienced a year-over-year average condo transaction price increase of nearly 25 percent.

In addition, tenants are proving by their strong monthly leasing activity that they want to live in Coral Gables despite rising rents.

Currently, Coral Gables has only about 40 days of residential rental properties available for lease at a median asking price of $2.07 per square foot monthly, according to data from the Southeast Florida MLXchange.

Tenants leased more than 700 residences at a median price of $1.96 per square foot month in Coral Gables in the first eight months of this year. Back in 2010, tenants leased just as many residences in Coral Gables but at a median price of $1.37 per square foot monthly.

Today’s median rental price represents a 43 percent increase in the last five years.

All of these market factors have spurred developers, who have announced nine new condo towers with nearly 1,100 units in Coral Gables since 2011, according to the preconstruction condo projects website CraneSpotters.com. (Full disclosure: my firm operates the website.)

The new Coral Gables condo projects are slated to range from the five-story Biltmore Park Condominium, with 32 units on Valencia Avenue, to the 18-story Miracle Residences, with 282 units slated for development on an existing Publix Super Market on LeJeune Road.

The city is an attractive market for condo developers, as both primary residents and second-home buyers are actively involved in this residential real estate market.

Coral Gables has distinguished itself as a wealthy enclave where multinational corporations – and their employees – locate to utilize the city’s public services, schools, restaurants, retailers and proximity to major transportation arteries.

As a result, Coral Gables is a multilingual city where 38 percent of the residents are foreign born, and more than 60 percent of the residents speak a language other than English at home, according to the Census Bureau.

The median household income in Coral Gables is nearly $85,200 annually — almost double the Miami-Dade County average of about $43,500.

Not surprisingly, the median value of an owner-occupied residence in Coral Gables is nearly $615,000 — compared to less than $222,000 in Miami-Dade County.

Despite the wealth, Coral Gables is a younger city than many may realize. Nearly 18 percent of the residents of Coral Gables are under the age of 18, while less than 16 percent of its residents are older than 65, according to the data.

By comparison, less than 21 percent of Miami-Dade County’s population is under 18, while 15 percent is over the age of 65.

The unanswered question going forward is whether buyers, sellers and developers can continue to operate at near market equilibrium in Coral Gables as the residential real estate conditions change in surrounding neighborhoods of South Florida.

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.

Coral Gables Condo Market Outperforms More Publicized South Florida Coastal Markets

Data collected Sept. 16. The closed sales statistics are from January through August of each respective year.

Active Listings

Coral Gables

Miami Beach

Greater Downtown Miami

Sunny Isles Beach

Hollywood / Hallandale

Downtown Fort Lauderdale And Beach

Boca Raton / Deerfield Beach

Downtown West Palm Beach

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

172

$376

1,850

$733

2,220

$488

795

$644

979

$295

554

$373

235

$306

205

$242

Closed sales (January through August)

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

Units

Average Price PSF

2014

216

$323

1,714

$509

1,345

$404

599

$429

1,089

$208

624

$290

318

$232

192

$241

2013

204

$264

2,081

$455

1,579

$364

712

$380

1,166

$167

665

$258

345

$292

219

$203

2012

227

$229

1,912

$405

1,343

$293

708

$326

1,156

$156

571

$227

283

$261

223

$181

2009

109

$247

1,038

$326

707

$216

448

$227

770

$167

418

$223

165

$264

114

$168

2006

156

$368

1,236

$477

640

$416

267

$422

607

$300

405

$374

165

$377

97

$342

2014 Unit Sales v. 2013 Unit Sales

6%

-18%

-15%

-16%

-7%

-6%

-8%

-12%

2014 Sales Price v. 2013 Sales Price

22%

12%

11%

13%

25%

12%

-21%

19%

2014 Current Price v. 2006 Peak Price

-12%

7%

-3%

2%

-31%

-22%

-38%

-30%

2014 Units Sales Monthly

27.0

214.3

168.1

74.9

136.1

78.0

39.8

24.0

Current Months Of Supply Of Units

6.4

8.6

13.2

10.6

7.2

7.1

5.9

8.5

Cranespotters.com

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