Residential development – specifically condo development – has really begun to ramp in South Florida over the last year or so, and it appears as if there will be no slowing down. A recent report noted that over 200 new condo towers have been proposed throughout Palm Beach County, Broward County and Miami-Dade County. From these numbers, it is obvious that investors and builders see a hotspot and they want to strike while the resurgent residential real estate market is still on the upswing.
The recent report further detailed that the average rate per square foot in a South Florida condo has shot up to $730. As with all real estate deals location is everything, so anyone who looks at that figure will have to remember that it is an average – which means that some condo towers actually have rates per square foot that are closer to $320, while others in the most choice locations have rates that soar above $2,000.
Land development has been a seemingly ever-present issue in South Florida, and the last time a building boom like this took place the bursting housing bubble was not far behind. This time, however, there seems to be much more confidence that the proposed units to be constructed will sell, with the recent report estimating that approximately 61 percent of pre-construction condo units in South Florida are already sold.
If there is one place in America where residential property is actually a hot commodity, South Florida is it. However, with more and more investors and builders wanting in on the action, it will be interesting to see what the impact is on prices going forward as more condo units are completed.
Source: Miami Herald, “Presale condo prices surge as 200th new tower proposed for coastal South Florida region,” Peter Zalewski, March 23, 2014