Nearly 80% of Owners Lost Money Reselling New Miami Condos

Nearly 80% of Owners Lost Money Reselling New Miami Condos

Nov 02, 2018 November 02, 2018

The average Miami preconstruction buyer lost 11% in resales from Q1-Q3 2018

CondoBlackBook.com recently teamed up with HB Roswell Realty to analyze new construction resales across Miami. We tracked condo units built from 2016 to 2018 in Miami’s urban core and beach areas where the original owner sold in the first three quarters of 2018.

What we found was suprising—most sellers lost money. On average, they lost around 11% when you factor in costs (1.7% at purchase and 6.8% at sale).*

Our team analyzed 102 new construction resales in Greater Downtown Miami, Coconut Grove, Miami Beaches and the surrounding islands (except Fisher Island and Key Biscayne) that closed in 2018 and found that 38 broke even or made a profit, while 64 resales lost money—nearly 63% of the owners in our study. When factoring in likely buying and selling costs, we can reasonably conclude that only 22 broke even or made a profit, while 80 resales lost money.

That means 78% of sellers were most likely left in the red after closing.

Click here to download a list of all the sales we used in our analysis
(Want to get our reports and insights emailed right to you? Scroll to the top and sign up.)

Biggest Individual Winners & Losers

WinnersLosers
Biggest winner by %
Palau Sunset Harbor at 1201 20th St, Unit #201. Purchased new in 2016 for $1.549M and sold in June 2018 for $2.65M, a gain of 71.1%.
Biggest loser by %
Centro #1711. Purchased new in 2016 for $376,900 and sold for $230,000 in August 2018, a loss of 39%.
Biggest winner by $
The Surf Club at 9001 Collins Ave, Unit #505-S with a gain of $1.4475M.
Bigger loser by $
Porsche Design Tower #4405. Purchased new in 2017 for $11.8M and sold for $7.4M in August 2018, a loss of $4.4M.

The Downside of Speculation
Many people buy preconstruction condos to get first choice of inventory, enjoy discounts and buyer incentives, or to realize equity growth while a unit is still under construction. Many of these buyers are end-users who don’t mind the ups and downs of Miami real estate, which inevitably yields growth on a long enough time line.

However, our analysis reveals the downside of trying to resell a new construction property in too short a time frame. The Miami condo market in 2018 simply wasn’t strong enough to absorb resales at newly completed condos, and many owners suffered as a result.

Biggest Condo Building Winners & Losers

Condo BuildingAvg. Gain or Loss %Sales in 2018Max GainMax Loss
Palau Sunset Harbor42.6%2$1,101,000$149,000
Echo Brickell23.2%3$414,000$118,900
Fendi Chateau Residences15.2%2$1,123,000$678,400
Oceana Bal Harbour13.5%2$1,044,000$500,000
One Ocean12.0%4$600,000-$1,354,100
Le Parc at Brickell11.3%1$77,600$77,600
The Surf Club9.4%4$1,447,500-$500,001
1010 Brickell3.0%8$129,500-$28,000
Hyde Midtown-0.7%1-$2,900-$2,900
Biscayne Beach-3.5%18$197,200-$329,900
Grove at Grand Bay-3.9%7$700,000-$850,000
The Bond-5.4%8$56,100-$158,900
Brickell City Centre-6.5%3$41,300-$130,900
Centro-8.3%7$22,100-$146,900
Cassa Brickell-8.6%1-$30,100-$30,100
SLS Brickell-8.6%7$37,100-$160,000
Brickell Heights-9.2%11$6,100-$249,900
Brickell City Center-11.0%3-$32,012-$96,800
Peloro-13.4%4-$14,900-$140,000
Marina Palms Residences-15.8%4-$35,500-$249,200
Porsche Design-34.7%2-$1,900,000-$4,400,000
Grand Total-2.6%102$1,447,500-$4,400,000

An Overabundance of Condo Inventory
In a 6-month period ending Nov. 2, our target analysis area saw 138 units sold in buildings built from 2016-2018. However, there are currently 1,840 units listed on the MLS, which doesn’t even include unlisted developer inventory.

Whereas normal inventory levels range from 9-12 months, we are currently averaging 81 months of inventory – that’s 7-9x normal.

To absorb these units, Miami either needs a major new major demand source, such as Amazon HQ2 opening in Miami or a major devaluation of the dollar, or else we should expect to see prices come down further on new construction units.

Conclusion: An Opportunity for Buyers
The good news is that those looking to buy now or in the near future have many advantages. They have their pick of new construction resales at excellent price points (often lower than what they first sold for), plus they can see the finished product as opposed to just floor plans and renderings. This means less risk and more clarity about what they are getting for their money. And finally, with inventory at such high levels, buyers who have time and patience will have a lot of negotiating power.

New Condo Construction Inventory Levels

Buildings built 2016-2018
(Source: Miami MLS; stats as of Nov. 2, 2018)

Months of New Construction Inventory
Highest: Downtown Miami (33132)
Lowest: South Beach (33139)

New Construction Units for Sale
Most: Downtown Miami (33132)
Least: Miami Beach / Mid-Beach (33140,33141)

Zip CodeSales in 6 months ending Nov. 2Available UnitsMonths of Inventory
3312944669
331302630169
331312539595
331322113339
331331910633
3313716410154
33139155321
3314000N/A
3314163434
331541214271
3316010227151
TOTAL135183081


*All numbers are best estimates based on public records research and knowledge of the average costs and fees associated with Florida real estate transactions. Analysis based on sales data pulled from tax records on Sept 16, 2018. Only sales where both the original sale and resale were listed, and the resale showed up as a qualified sale per county tax records, were included in this report. We did not factor in unknown expenditures such as upgrades and finishes or mortgage-related costs, if any, and treated each sale like an all-cash deals for the sake of simplicity.

Contact Us
Sep Niakan
Broker / Team Lead
(305) 697-7667
sep@blackbookproperties.com
Request Info
By sending you agree to CondoBlackBook's Terms of Use

Your Miami Condo Awaits

Recent Posts

How to Spend the 4th of July in Miami & More Summer Events 2022 - Miami Swim Week, Rolling Loud Miami, Swedish House Mafia, Ballet Festival
Lifestyle How to Spend the 4th of July in Miami & More Summer Events 2022 - Miami Swim Week, Rolling Loud Miami, Swedish House Mafia, Ballet Festival
Summer is hot in Miami and so are the events. We’ve got all you need to celebrate July with a bang! With an overflowing events calendar this summer, you’ll be spoilt for choice. Continuing with Miami Hotel discounts and topping those with Miami Spa special savings, you won’t be able to resist a weekend or two for self-care. Music lovers of every sort are in for a treat as the Rolling Loud Fest, Miami Salsa Festival, MB Classical Music Fest, Seaside Summer Fest, and Swedish House Mafia hit the stage in Miami. There are also plenty of summer camps and activities to keep the kiddos blissfully busy. Not to forget, the Fourth of July is right around the corner and Miami’s night sky is going to be lit with fireworks and the sweet smell of all-American barbecues. Check out our special curation of Independence Day events to make the holiday even more spectacular. And, read more below for a complete list of Top Things to Do in Miami this July 2022: Things to Do in Miami - July Events at a...
The 5 Most Luxurious Condo Buildings in Downtown Miami
Real Estate News The 5 Most Luxurious Condo Buildings in Downtown Miami
Downtown is, and continues to evolve as, one of Miami’s top neighborhoods, especially because of its central location to all that Miami has to offer, its views of Biscayne Bay, and its major public transportation hubs. In recent months, developers have been delivering world-class projects with unmatched luxuries in this urban core.  Today, a host of ultra-luxury buildings call Downtown Miami home, and we’ve listed the 5 Most Luxurious Condo Buildings in the neighborhood that set the bar for top-notch living. We’ve also included a few bonus pre-construction condo buildings that will provide even more luxurious lifestyle options for you to choose from if you’re looking to move to Miami or invest in this international city. Last updated on June 23, 2022 Why Choose Downtown Miami? Downtown is home to some of Miami’s best art, culture, shopping, entertainment, and social hotspots. It not only ties for #1 on our 11 Most Walkable Neighborhoods in Miami report, but is also the best...
Video: Agent Faves - Our 3 Favorite Condo Buildings in Sunny Isles Beach, Miami
Video Blog Video: Agent Faves - Our 3 Favorite Condo Buildings in Sunny Isles Beach, Miami
Close enough to all the action in Aventura and Miami Beach, yet far enough removed from touristy chaos, Sunny Isles Beach has turned into a darling for luxury developers in recent years. This upscale seaside community is home to an enviable collection of luxury-branded, high-rise condo towers, such as the Porsche Design Tower, Estates at Acqualina, Mansions at Acqualina, Turnberry Ocean Club, Muse, Jade Signature, and each one more luxurious and beautiful than the next. But we have a few that top our list of favorites. Check out Blackbook Properties’ Condo Specialist and licensed agent Vera Berezhnaya talk about her top 3 favorite luxury condo buildings in Sunny Isles Beach: Residences by Armani/Casa What we love about this building? Every unit in this oceanfront high-rise features a summer kitchen.  Milan couture meets Miami charm in this 66-story ultra-luxury high-rise. Besides affording private beach access, this 649-foot glass tower features 308 designer condos with interiors...
The Top 10 Miami-Area Beachfront Condos in Preconstruction Right Now!
Real Estate News The Top 10 Miami-Area Beachfront Condos in Preconstruction Right Now!
What’s more popular than Miami and South Florida’s sensational beaches these days? It’s our upcoming beachfront properties that are topping wishlists across the globe – luxury created for buyers from New York to New Zealand!  Regardless of whether you’re looking to move to the beachside for dazzling morning-to-night water views, instant access to a yachting lifestyle, or simply for bragging rights – an oceanside home in South Florida tops the wishlist for many - there are several upmarket projects on the horizon that offer you an oceanfront address. With developers eager to stay relevant in Miami and South Florida’s growing condo market, there are plenty of luxury, oceanfront condo preconstruction projects in the pipeline. Here’s our list of the Top 10 Upcoming Luxury Beachfront Condo Projects in Miami and Pompano Beach: Miami and South Florida’s Beachfront Condo Preconstruction projects at a glance: The Perigon - Mid-Beach Bentley Residences - Sunny Isles Beach St. Regis Residences...
Video: Comparing Miami’s Best Neighborhoods - Coconut Grove vs Brickell
Video Blog Video: Comparing Miami’s Best Neighborhoods - Coconut Grove vs Brickell
When most people are thinking about moving to Miami, two super popular neighborhoods are Coconut Grove and Brickell. These two neighborhoods are pretty much neighbors, and only about a 5-10 minute drive separates them. But they are very different and offer completely different lifestyles and vibes. So, how can you know if Brickell - the Manhattan of the South – is right for you? Or will the laid-back and tropical Coconut Grove neighborhood be better? Check out our video comparing these two Miami neighborhoods to help you decide which one could be your next home.  Coconut Grove vs Brickell While both areas provide plenty of variety in housing options, they also offer differing lifestyles and benefits. We’ve provided a comparison of these two popular Miami neighborhoods based on categories we think are important to living a good quality of life – things like lifestyle, parks and green space, shopping, entertainment and culture, walkability and transportation, and cost of living...
42 Pine: Boutique luxury and Kosher-friendly in Miami Beach
Preconstruction 42 Pine: Boutique luxury and Kosher-friendly in Miami Beach
It’s beautiful. It’s boutique. It’s Kosher-friendly. And, it’s in Miami Beach. Developer JP Roosevelt LLC, an entity managed by New York’s Boylmelgreen family, recently launched early sales and secured a $35.5 million loan to start the boutique condo project in the exclusive Pine Tree Drive area of Miami Beach. At only 8 stories, 42 Pine will offer 1 - 3 bedrooms residences, starting at 700 square feet and going to 2,700 square feet. Set for a 2023 completion, early friends and family pricing start at $700,000. Its eight exquisite penthouses start from $4 million.  Designed to offer modern luxury for Jewish residents, 42 Pine will feature gourmet Kosher kitchens, offerings two sinks, two sets of appliances, and separate cabinets for meat and dairy dishes – a true one-of-a-kind condo project in Miami Beach. 42 Pine: A Luxurious Hill Town in Miami Beach  42 Pine will be an 8-story condo community with 50 move-in-ready residences. Designed by Miami’s award-winning Arquitectonica,...