Miami Real Estate: Number of New Condo Construction Not Achieved, Condo Sales Expected to Increase in 2016

Last year, developers finished around 3,050 new condo units located east of Interstate 95 in the South Florida.

As of now, a total of 56 new condo buildings were built comprised of more than 4,200 units in Miami-Dade, Broward and Palm Beach counties. Aside from that, there are 125 new condo buildings that are currently constructed with more than 12,600 units, Miami Herald reported.

But even if the number seems large, it is still lesser than the scheduled 6,400 units in South Florida that should be delivered last year.

One reason for the delay could be the changing real estate market conditions that increased the cost of construction. Because of this, developers are still unsure of what will happen to around 1,200 new South Florida condo units that was supposed to be constructed and completed last year.

For now, the developers are set to finish around 95 new condo buildings that have more than 7,800 units for the year 2016. Aside from the target condo constructions for this year, the 2,150 unfinished condos of 2015 will be carried over and will be combined with the 5,700 units scheduled for completion in 2016.

But because of the changing market conditions, it is still unclear if all the units will be completed. Completion dates were also not revealed yet. Aside from that, the slowing preconstruction sales may also affect the creation of the new condo units.

Meanwhile, reports reveal that there could be a recession on real estate market for Miami condo sales but this is considered as a healthy marker by CMC Group CEO Ugo Colombo.

“It is leveling off at a sustainable rate,” Colombo said, according to The Real Deal. “You cannot expect to keep selling 100 units a month. Right now, there is a healthy balance of supply and demand.”

Gil Dezer of Dezer Development also said that the slowdown may also mean that the industry is becoming cautious.

“All our projects in Sunny Isles Beach have been staggered six to eight months from each other,” Dezer said who is currently building Porsche Design Tower and Residences by Armani/Casa in Sunny Isles Beach. “There are not a ton of closings taking place in one day and we are not putting a ton of units out there at one time.”

But Dezer also added that he is seeing more condo sales in 2016 for units that are completed and for those that are nearly completed. However, even if the sales slowed, the construction of condo buildings skyrocketed.