After the 12-story Surfside condo complex collapsed, experts wondered if condo demand would decline – but 3Q Miami-Dade condo sales were the highest in years, with luxury units selling at a record pace. Any stigma seems isolated to older inventory and buildings close to the Surfside tragedy.
MIAMI – The deadly collapse of a 12-story condo tower in Surfside left urgent questions about the safety of similar buildings – and also the future of South Florida’s condo market, especially in older buildings.
New data shows the market only heated up, with record sales and price growth across South Florida in the third quarter of this year, according to a preliminary report on the impact of the collapse on the condo market by Analytics, a Miami-based real estate research firm.
Sales for condos in Miami-Dade County in the third quarter of 2021 were the highest in years, with 6,259 units sold. The priciest units – those over $1 million – also sold at a record pace, with 663 closing in the third quarter, a 228% increase from pre-COVID levels in 2019, data shows.
The boom continued elsewhere in South Florida, too.
“The flow of capital to South Florida shows absolutely no sign of abatement,” said Ana Bozovic, founder of the firm. The company expects to release a full report on the aftermath of the collapse of the Champlain Towers South and its effect on the condo market later this week.
The numbers are the highest for a third quarter in years, the data shows. There were slight dips heading into the third quarter, but that trend happens each year because the second quarter always has the highest sales volume of the year, Bozovic said.
On the ground, agents are seeing record numbers of buyers flocking to South Florida condos. Preconstruction sales are up along with sales of existing condos and their selling prices, said Sepehr Niakan, broker and owner of Blackbook Properties in Miami.
The 40-year-old Champlain Towers South collapsed in the early morning on June 24, after numerous engineering reports had warned of concrete deterioration and $9 million in needed repairs. At the time, some experts warned that older condos could see declining sales as prospective buyers got skittish about maintenance costs and safety.
“If there were to be any negative market effects, they would be isolated to older inventory and to inventory immediately around the site of Champlain Towers,” Bozovic said.
The condo-heavy area surrounding the collapse site did see a drop in sales, falling to pre-COVID levels in the months that followed the tragedy, data shows. The Surfside area is a smaller market, and usually sees about 100 transactions a year, noted Bozovic. The third quarter saw 16 condos sold, down from about 50 in the second quarter and a little under 60 sales in the first quarter of 2021.
It’s something Realtor Vivian Fernandez with Ocean Yes Realty in Miami has seen play out with some of her clients. Her business slowed down briefly after the collapse, but quickly picked up steam again.
Fernandez said she noticed a slight uptick in buyers interested in newer condos – those built after 1990. Her business sold 697 condos from just after the aftermath of the collapse to the beginning of October. Of those sold, 39.7% were in buildings constructed after 1990. For the same period in 2020, about 31% of sales were in newer buildings.
Prospective buyers are also asking more questions about the integrity of the building, Fernandez said. Instead of focusing on cosmetic changes like the layout of the unit, buyers are asking to inspect the basement to make sure the structure of the building is safe.
Things could change in the market, however, as insurance companies begin to decide which buildings they will insure based on repairs and maintenance, said Peter Zalewiski with Condo Vultures in Miami.
© 2021 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.
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Author: kerrys