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South Florida Luxury Market Saddled With 3-Year Supply Of Condos Listed For Sale During COVID-19 Pandemic

Buyers Paid Average Of $816 PSF For South Florida Luxury Condos In First Half Of 2020 

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

DOWNTOWN MIAMI (Aug. 3, 2020) - More than 3,700 luxury condo units are formally listed for sale at a minimum price of at least $1 million each in the tricounty South Florida region of Miami-Dade, Broward and Palm Beach amidst the COVID-19 pandemic, according to a new report from Condo Vultures® Realty LLC.

Based on luxury condo sales of about 102 units monthly in the first six months of 2020, South Florida now has more than a 36-month supply of units available for purchase in the tricounty region 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.

It is worth noting this report only tracks those South Florida condos that are formally listed for sale. The report does not factor in the nearly 47,750 new condo units currently in the development pipeline east of Interstate 95 in the tricounty South Florida region, according to CraneSpotters.com.

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 - did not mandate masks 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 has nearly 67,715 cases, Broward has nearly 31,485 cases and Palm Beach has 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. 3, the COVID-19 pandemic has resulted in nearly 491,900 confirmed cases and more than 7,235 total deaths in Florida. In the tricounty South Florida region, there are nearly 215,000 cases and about 3,300 deaths, according to the state website. 

On a county-by-county basis, Miami-Dade had more than 122,730 confirmed cases and nearly 1,700 deaths; Broward had more than 58,000 confirmed cases and nearly 750 deaths; and Palm Beach had nearly 34,250 confirmed cases and about 845 deaths, according to the state website.   

This being said, about 275 South Florida luxury condo units are under contract waiting to transact - or pending - at an average asking price of nearly $3.1 million each or about $1,172 per square foot, according to the statistics. 

The average asking price of a South Florida luxury condo currently listed for sale is nearly $2.8 million per unit. This works out to an average asking price of about $1,005 per square foot, according to the data compiled by CondoVulturesRealty.com.

In the first six months of 2020, the average transaction price of a South Florida luxury condo was less than $2.3 million or about $816 per square foot.

This means the current asking price of a South Florida luxury condo listed for sale is less than 22 percent higher than the average transaction price achieved on a per-unit basis and more than 23 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, South Florida sellers who were able to unload their luxury units needed about 173 days to transact a condo listed for sale. The current Days-On-The-Market average for a South Florida luxury condo listed for sale is about 268 days, according to the stats.

The number of Days-On-The-Market for the luxury condo units currently under contract - or pending - is 264 in South Florida, according to the stats. 

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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