Nearly 25 Distressed Miami Beach Condos Listed For Sale During COVID-19 Pandemic

Buyers Purchased 30 Distressed Condos In Miami Beach In First Half Of 2020

(This Report Is Powered By The Condo Vultures® Podcast Series Featuring Expert Peter Zalewski

DOWNTOWN MIAMI (Aug. 29, 2020) - Nearly 25 distressed condo units - both shortsales and real estate owned (REO) by lenders - are formally listed for sale in the Miami Beach market of South Florida during the COVID-19 pandemic, according to a new report from Condo Vultures® Realty LLC.

Based on distressed condo sales of about five units monthly in the first six months of 2020, Miami Beach now has nearly a five-month supply of REO and shortsale units available for purchase in the tricounty South Florida region of Miami-Dade, Broward and Palm Beach during the traditional Summer Buying Season, according to the report based on data from the Southeast Florida MLS Matrix.

A balanced market is generally considered to have about six months of supply. More months of condo supply listed for sale suggests a buyer’s advantage and less months typically indicates a seller’s advantage in the market.

In this new COVID-19 pandemic era, numerous questions exist about how the South Florida residential real estate market will perform going forward, both in the short- and medium-term periods. After a typical start to the new year, the South Florida residential real estate market began to change dramatically at the end of the first quarter of 2020. 

When Florida Gov. Ron DeSantis declared a "state of emergency to create a pathway to obtain funding and resources to stop the spread of COVID-19" on March 9, 2020, the South Florida residential real estate market continued to function, albeit with changes for safety that included social distancing and a push for virtual tours instead of buyer actually visiting properties.  

Nearly a month later on April 3, 2020, DeSantis instituted a 30-day "statewide stay-at-home order" that effectively shut down the Florida economy but in doing so deemed residential and commercial real estate businesses "essential services," according to an industry press report.

Despite the ability to transact real estate during the "stay-at-home order," it is unclear how many buyers have been willing to view properties - either in person or virtually - in hopes of purchasing residences. It is also unclear how many sellers have opened their properties to potential buyers given the contagiousness of the COVID-19 virus. 

Once the "stay-at-home order" was finally lifted on May 4, 2020 for nearly all of the state - excluding the tricounty South Florida region of Miami-Dade, Broward and Palm Beach - the Florida economy was thought to be in recession like much of the United States. Palm Beach County eventually opened its economy on May 11, 2020, and a week later both Miami-Dade and Broward counties opened for business on a limited basis on May 18, 2020.

A month later during the week of June 22, 2020, Miami-Dade and Palm Beach counties instituted mandatory mask wearing in public areas in response to a "spike" in the number of COVID-19 cases in the South Florida region, according to a press report. 

Broward County - located between Miami-Dade and Palm Beach counties - recommended but did not mandate masks be worn in public areas.

After Independence Day, Miami-Dade County took a step backward and shut back down restaurant dining rooms, party venues, gyms and short-term rentals due to a spike in new COVID-19 cases, according to a press report.    

With the situation worsening, the state of Florida surpassed New York on July 12 for the distinction of having the most new COVID-19 cases reported in a day with more than 15,300, according to a press report.  

A day later on July 13, an additional 12,624 new cases were reported in Florida, pushing the state number of COVID-19 cases to at least 282,435 with more than 121,000 cases in the tricounty South Florida region. On a county-by-county basis, Miami-Dade had nearly 67,715 cases, Broward had nearly 31,485 cases and Palm Beach had more than 21,800 cases, according to a press report. 

As of July 24, Florida had more than 402,300 confirmed cases of COVID-19 with nearly 5,700 deaths, according to the Florida Department Of Health's COVID-19 Data And Surveillance Dashboard.

On that same day, the tricounty South Florida region had about 172,440 confirmed cases - representing about 43 percent of the Florida total - and about 2,660 deaths - representing about 47 percent of the state total, according to the state dashboard. 

As of Aug. 24, the COVID-19 pandemic had resulted in nearly 603,000 confirmed cases and nearly 10,400 total deaths in Florida. In the tricounty South Florida region, there were nearly 260,900 cases and nearly 4,450 deaths, according to the state website.

On a county-by-county basis, Miami-Dade had more than 151,675 confirmed cases and more than 2,250 deaths; Broward had more than 68,825 confirmed cases and more than 1,130 deaths; and Palm Beach had more than 40,360 confirmed cases and more than 1,060 deaths, according to the state website.   

This being said, about 11 distressed condo units are currently under contract - or pending - and waiting to transact in Miami Beach. 

On the REO front, the average asking price of the 16 Miami Beach REO condos currently listed for sale is about $462,525 per unit. This works out to an average asking price of about $464 per square foot, according to the data compiled by CondoVulturesRealty.com.

In the first six months of 2020, the average transaction price of a Miami Beach REO condo was more than $292,470 or about $315 per square foot.

This means the current asking price of a Miami Beach REO condo listed for sale is about 58 percent higher than the average transaction price achieved on a per-unit basis and more than 47 percent higher than the average transaction price on a per-square-foot basis between January and June of this year.

In the first half of 2020, the lenders that were able to unload their REO units needed about 56 days to transact a Miami Beach condo listed for sale. The current Days-On-The-Market average for a Miami Beach REO condo listed for sale is about 121, according to the statistics.

On the shortsale front, the average asking price of the seven Miami Beach shortsale condos currently listed for sale is nearly $2.1 million per unit. This works out to an average asking price of about $554 per square foot, according to the data compiled by CondoVulturesRealty.com.

In the first six months of 2020, the average transaction price of a Miami Beach shortsale condo was about $259,750 or about $320 per square foot.

This means the current asking price of a Miami Beach shortsale condo listed for sale is more than 697 percent higher than the average transaction price achieved on a per-unit basis and more than 73 percent higher than the average transaction price on a per-square-foot basis between January and June of this year.

In the first half of 2020, the sellers that were able to unload their shortsale units needed about 174 days to transact a Miami Beach condo listed for sale. The current Days-On-The-Market average for a Miami Beach shortsale condo listed for sale is more than 347 days, according to the statistics.

CondoVulturesRealty.com is a licensed Florida brokerage that specializes in assisting buyers and tenants in value-oriented condo acquisitions and leases in the tricounty region of Miami-Dade, Broward and Palm Beach.

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