27,642 New Condos in Miami-Dade County

Miami Skyline

The amount of residential condo towers currently being planned or under construction in Miami-Dade County is the topic of conversation in South Florida and other parts of the world.  Why? Because today in South Florida, there are 256 new residential condo towers, consisting of about 35,132 condo units, being planned or in the construction phase in South Florida.  Miami-Dade County, alone, accounts for 173 of these 256 condo towers.  In Miami-Dade County, there are approximately 27,642 condo units being planned or currently under construction with almost 18,300 of these condo units residing in the Greater Downtown Miami and Brickell areas, according to the Miami Herald.

Because of the rapid growth of Miami new construction condo developments and similarity in the number of condo units being constructed, some people—mostly non Miamians, are starting to question whether or not Miami could have a condo crash similar to the crash in 2008.

First, there is a major difference between the Miami condo market today and during the boom of 2003–2007.  Today, developers astutely rely less on bank financing and more on pre-construction deposits from condo buyers—sometimes, the buyer gives as much as 50% of the contract price up front.  When someone buys a Miami pre-construction condo, he/she must put down a certain percentage of the contract price at reservation of the condo unit and follow with another percentage at contract, groundbreaking, various stages of construction and then the balance at closing.  The percentages of deposits completely vary with each condo development and there is no set standard.  These deposits are used by the developers to cover the costs associated with construction which almost completely replaces bank financing…the buyers are financing the project with their own money!

So, with this major difference, why are people still trying to compare today’s Miami condo market with the Miami condo market in the boom of 2003-2007? Because the numbers are similar.

According to the Miami Herald, today, South Florida has about 35,132 proposed condo units to be built in Miami-Dade, Broward and Palm Beach counties-east of Interstate 95.  Similarly, right before the market crashed in 2008, more than 49,000 condo units were being built in Miami-Dade, Broward and Palm Beach counties-east of Interstate 95.

In addition, today, about 79% of all proposed new construction condo units in South Florida are in Miami-Dade County with the majority of these condos concentrated in the Greater Downtown Miami and Brickell areas.  Similarly, during the condo boom that started in 2003, Miami-Dade County was home to about 70% of the new construction condo units with about 22,200 of those condo units being in the Greater Downtown Miami and Brickell areas.

Yes, the numbers today and during the condo boom that started in 2003 are similar, but this alone should not make buyers uneasy.  Buyers must look at the significant factor that is different about today’s condo market versus the 2003 boom—CASH MONEY!

The real estate market crashed in 2008 mostly because bank financing had dried up and buyers did not have enough cash to close on their pre-construction condos once completed.  The condo developers are not relying on buyers needing financing anymore, accordingly, buyers, you should not feel uneasy about today’s Miami condo market.  In fact, most people in the Miami real estate industry are quite confident that South Florida will avoid anything remotely close to what happened in 2008.

Finally, with all of the positive changes going into effect in Miami including the Brickell City Centre, Miami Worldcenter, Miami Arts District, Museum Park and etc., people should be excited to buy a home in Miami!

South Florida Condo Market | Source: CraneSpotters.com

If you, or someone you know, would like more information on any condos in Miami or simply have a question about the Miami real estate market, please contact Michael Light of Miami Luxury Homes. You can reach me directly at my office at 305-350-9842, on my cell phone at 786-566-1700 or via email at michael@miamiluxuryhomes.com.