Manageable Inventory
While some new towers have a large number of condos being flipped by their owners, an inventory glut will be mitigated by minimal competition from developers, who have a majority of their units under contract, data from Miami’s Downtown Development Authority show.
“The inventory under construction is manageably pre-sold, and the pipeline of new projects in reservations and contracts is shrinking,” according to an authority report prepared by Integra Realty Resources Inc. analysts. “Investors, bankers and developers are rightfully approaching the market with caution, and a heightened sense of the need for better due diligence.”
Of 14 new Miami towers from downtown to Sunny Isles, the share of resale listings ranged from about 7 percent at MyBrickell tower to about 40 percent at 400 Sunny Isles, according to a report this month by Andrew Stearns, founder of StatFunding.com, which provides residential mortgages for foreign nationals. A healthy building should have no more than about 10 percent of its units up for resale at any given time, Zalewski said.
“The concern is we’re in a price-discovery phase, and the prices people are trying to get for their condos is a lot higher than the market will bear,” Stearns said. “That may signal a coming price correction.”