Miami Condo News

There’s no question that South Florida’s condo market is on the ropes,
but some complexes are faring much, much worse than others.

Prices
in the most battered complexes have fallen by at least 75 percent since
peaking, bringing huge financial losses for owners and lenders.

In
a ranking of the 10 worst-performing projects, Keystone Towers in North
Miami topped the list, with unit prices dropping 81 percent since
peaking in 2007, according to a new analysis of first-quarter sales
from Miami-based condo research firm CondoReports.com

Sales in Keystone Towers, an apartment complex converted to
condominiums during the boom, peaked in 2007 with 20 units selling for
an average of $334 per square foot. At the end of March, the price had
fallen to $62 per square foot.

That
means an owner who bought a 1,000-square-foot unit for $334,000 would
have seen a similar unit go for $62,000. The loss in value: $272,000.

Not
every building saw similar bloodshed, though. Three projects located in
what generally are considered desirable submarkets actually saw sale
prices increase, supporting analysts’ claims that the recovery of the
housing market will be submarket specific and even building specific.

Seven of the top 10 best performers still saw erosions in value.

The
analysis looked at closed sales in 2,000 condominium and town-home
complexes in Miami-Dade County built before 2008. Projects making the
list had at least three sales in the first quarter.

”The fact
that a fraction of 1 percent of the buildings in the study experienced
increased pricing is indicative of a market where prices have decreased
nearly across the board with few exceptions. The major difference, of
course, is the degree of the price declines,” Adam Cappel, president
of CondoReports.com, said in a statement.

Despite the economic downturn and a tight credit market, people are filling up condominiums in downtown Miami, according to a study released Thursday by the Miami Downtown Development Authority.

The study found that 62 percent of the 73 condo developments and seven rental apartment buildings in the downtown area that have come online since 2003 are occupied.

“This is the first study since the start of the construction boom that provides a complete picture of the number of people living in downtown Miami,” said Lewis M. Goodkin, founder of Goodkin Consulting, which conducted the research.

Lower prices and location are driving the demand, according to Craig Werley, founder and president of Focus Real Estate Advisors.

Last month, the South Florida Business Journal reported that condo rental programs were transforming urban Miami, attracting more young professionals and making a dent in the oversupply of housing from the condo boom.

Among other findings:

• Condominium inventory and discounted trading prices will continue to enhance the attractiveness and affordability of the urban lifestyle in the downtown area.
• Of the 21,616 new condominium units completed, 13,337 have closed. Of those, 98.6 percent are occupied.
• Average monthly sales of new units during the past three months increased over the three months prior, with a 12-month average of about 70 recorded closings a month.
• The average monthly sales and leasing activity of new units has been about 350 units a month.
• During the four-year period from 2004 through 2007, an average of more than 2,000 condo units, on average, were absorbed each year. In 2008, more than 4,200 units were sold, despite the collapsed housing market and general economic recession.
• Of the total inventory of residential properties for sale in Miami-Dade County last month, 26 percent were located in downtown Miami.
• Historically, more than 70 percent of downtown Miami residents were renters. So, the balanced 50-50 mix between owners and renters in new downtown condominiums indicates a steady increase in home ownership among area residents.

Shortly before completing a bulk sale of 31 units, the developer of the 1060 Brickell condominium in Miami’s financial district secured an extension on its construction mortgage.

On June 2, New York-based iStar FM Loans gave IMICO Brickell until April 1, 2010 to repay the $153.3 million mortgage, according to Miami-Dade County court records.

While the document didn’t list the original maturity date, or the amount outstanding under the mortgage, it said the agreement was retroactive to March 1.

Last week, the Business Journal published a report by Bal Harbour-based brokerage Condo Vultures that said IMICO Brickell sold 51 units for $6.1 million, or $203 a square foot, on June 17 to 1060 Brickell Apartments, a group headed by Carlos Mattos.

County records show that 338 of the 570 units in 1060 Brickell have been sold since it started closings in January 2008.