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Friday, April 11, 2014

South Beach Condo Sales Prices Soar 17.9% in Q1 2014

The prices in South Beach (Miami Beach, FL 33139) condo market have again set another record high during the first quarter of 2014. The Avg. Sales Price per SqFt climbed to an all-time high of $593 (Figure 1). This is nearly 10% higher than the previous record of $541/SqFt set in Q2 of 2013 and 17.89% Year-Over-Year increase (Table 1). Besides the fact that Q1 is the high season for real estate in South Florida, the high demand for condos has been further fueled by local and international cash buyers, shrinking inventory, a better US economy and a high flying stock market.
The number of condos sold during the past 12-months in South Beach was 1,455. The number of new listings was 1,827, yielding an absorption rate of 80%. The highest sales price was $3,592 per SqFt, and the lowest sales price was $14 per SqFt. There are currently 1,028 condos for sale, with prices that range from $8,200 to  $13 per SqFt, and sizes that range from 10,263 to 200 SqFt.

Sales Price Analysis

The overall South Beach condo market has been exhibiting single-digit Year Over Year Quarterly Sales Price/SqFt growth during the past three quarters. The high season is normally during the first quarter, which is when prices tend to be driven higher as demand picks up. However due to the very low inventories during the past year, the market has been driving prices steadily higher.
The quarters Q2, Q3 and Q4 showed a Year-Over-Year Avg. Sales Price/SqFt growth of 5.25%, 5.67% and 2.82% respectively (Table 1). Normally you would expect a steep slow down during Q3, which is the low season in South Beach, however the smallest Year-Over-Year growth was during Q4, which normally marks the beginning of the high season. This indicates a potential early signal of a market slow down which we will look into further when we analyze two other key metrics, inventory and days on the market.