Q1 2020 Continuum on South Beach Market Report
- April 27th, 2020
An In-Depth Analysis of Continuum on South Beach Units for Sale
The David Siddons Group has been studying and reporting on the Miami Real Estate market for over a decade now. Ever since our first report on the market we have been searching for better ways to read the markets and thanks to technology we have not only been able to write on the market, but to create analytical tools and software in the form of dashboards to tell clients (both buyers and sellers) what is going on. As Warren Buffett so accurately put it:
“If you can’t read the scoreboard. You don’t know the score.
If you don’t know the score, you can’t tell the winners from the losers.”
Looking for a Luxury Miami Condo for sale? We wrote several reports about Smart Miami Condo Investments. Read our 2020 Miami real estate report part 3, which discusses the top 10 of most luxurious Miami condos for sale based on price per SF and part 4, which discusses the Miami condos with the best potential for deals!
We use several real estate tools for our reports to help understand the markets and once you see them you also will be able to understand the markets better!
The Condo Geeks dashboard is by far the most advanced of the tools we have created. This is the brain child of my partners and myself to create a visual representation of the markets and specific condos. What would have previously taken hours or more likely days to analyze and format, can now be accomplished in mere seconds! This tool is not simply pulling data live from the MLS and collating it into easy to understand charts. It has been scrapped meticulously to remove anomalies as well as filling in gaps that the MLS did not record through cross referencing with the Florida Tax Roll. Simply put it’s much more accurate. If you want to buy or sell a condo at Continuum on South Beach, the below information is essential.
2020 Has not recorded any 1 bedroom sales as yet, however 2019 saw 6 sales for an average sales price per SF of $1,170. As you can see from the first screen below (lower, left corner) this average sales price is up from 2018 and we are back at 2012/2013 levels. This means the market has been correcting and we are back to prices previously seen just before the 2014 peak! Can the current price levels drop further? Yes they can and we do expect this to happen in the near future. The current restrictions due to Covid-19 are also not favorable for sales.
Inventory levels are at 7 and 12 months (screen 2) which indicates a healthy buyer’s market. In 2019, the average discount on the listing price of one bedroom units was 9%! Historically seen over the years this percentage varies between 6% (South Tower) and 9% (North Tower)
Units stay on average 300+ days on the market (caused by some units being on the market for more than 500 days) while most units are on the market around 5 months before being sold.
The average price per SF for South of Fifth 1 bedroom condos was $770 per SF in 2019. The overall 1 bedroom market in South of Fifth shows a more steady behavior than the 1 bedrooms at Continuum (refer to the lower, left section of the first screen – the dark blue background columns indicate the average price per SF for all 1 bedrooms in the South of Fifth market).
Advice for Buyers
With many units sitting in the market for 5+ months and the market being a buyer’s market this is a good time to negotiate and to get good deals. The market is currently correcting and we expect the market to correct further as there is more room for prices to go down. Since the rental demand is also low, that is not a good investment unless a unit is bought below $1,000 per SF. Renting out a 1 bedroom gives almost no return on investment at current market prices.
The only one bedrooms with a good view (South views over Fisher Island) are located in the South tower (03 Line). These units are priced higher than one bedroom units in the North Tower, which are all located on low floors and offer north views.
Advice for Sellers
Despite the low levels of inventory, one bedrooms are not faring very well and we expect the market to correct a bit more. If you are willing/able to hold on to your unit for at least one or two more years you are better off to hold it. Otherwise be willing to price it at market value. Those who bought during the 2014-2016 peak might have to sell at a loss. Looking at the difference between sales and listing prices for one bedrooms (upper left corner of the first screen) you see that the difference between asking and listing prices is substantial. Sellers are listing for $2,000 per SF, which is about $800 per SF more than what they will eventually get. Compared to other South of Fifth condos, the gap for Continuum one bedrooms is relatively much higher. The market is not hot right now, so we do not advice to list above market price. We have seen some extremely well finished units selling for high prices per SF, but those are exceptions.
The 2-bedroom market seems to be correcting still. Only 2 sales happened in 2020, and those sold for less than the 2019 average ($1,490 vs $1,715). There were 3 sales in the first quarter of 2020, while 2019 recorded 13 sales in total. Meaning we are slightly behind schedule as we enter Continuum’s “low season”. While many Miami condo markets are showing 2012 price levels, the two bedroom market at Continuum is still seeing prices above that level. This makes it highly likely the market will continue to correct.
We are currently seeing 17 listings in the south tower and 19 in the north tower. Especially the north tower sees a high level of inventory with 57 months, while the south tower sees 20 months. With an average of 200-300 days on the market (Most units sell between 150 and 250 days) this market is clearly experiencing some difficulties.
The big picture is that the market is still adjusting and the uncertainty won’t help speeding up the process.
Elements like the international economies on a halt due to CoVID 19, uncertainty regarding the post-COVID19 period and upcoming elections will actually slow down the process and will play in favor of the buyers who will be ready to pull the trigger.
Advice for Buyers
This is a SOFT MARKET, as this market is where most of the inventory sits. With a lot of inventory and the market still correcting here is where buyers can get some good deals. Please be cautious to not overpay for a unit. Good renovations are worth the price as they are costly and lengthy, but for you to pay over $1,700 per SF for a unit with ocean views, but with original finishes is not recommended. Please check here the difference in prices between renovated and original units. Please know that the average discount on the sales price is about 6 to 8% in the last 2 years. Contact David Siddons from Continuum Experts (305.508.0899) to verify whether a unit is well priced or overpriced.
Advice for Sellers
You are in a tough market to sell with relatively a very high amount of months of inventory. This means there is more supply than demand and we are entering the low season. Besides this there is plenty of room for the market to correct. Depending on how urgently you need to offload your unit we suggest you do not sell if you don’t have to (a one or 2 year wait is suggested). If you have to sell and want to do this quickly we suggest you follow market prices. This means only list your unit for $1,500 per SF+ if you have water views and an updated unit. Ask us for more information on suggested market prices for the different units.
Three bedroom units have gained in popularity in the last few years. Prices however corrected heavily from its 2014-2016 peak period. The one sale in 2020 was sold below the 2019 average of $2,250 per SF, but is not necessarily an indication the market has softened. While 2018 and 2019 saw 6 sales, 2020 has just recorded one sale. The last year we have seen average discounts of 11-12%, something often seen with ultra-luxury product. The market is currently seeing 2013 prices and while there is room for correction, the high demand will probably keep price levels on track. With 18 units on the market that on average stay on the market for 250 days we see an inventory that is lower than 2 bedroom units. The north tower is seeing 24 months while the south tower is seeing 12 months just. As the average list price of a 3 bedroom is above $7M, 12 months is showing a healthy market.
Advice for Buyers
Inventory in the South Tower is showing us we are in a seller’s market while the north tower is still showing a buyer’s market. Three bedrooms are very desired with tax refugees and other relocations. If you see a well priced, nicely updated unit, make sure to come up with a serious offer, because you will most likely have some competition. The average discount on sales prices was about 6 to 8% in the last 2 years.
Advice for Sellers
To sellers of 3 and 4 bedroom units we can tell to make good use of the momentum. The first months that a unit is placed on the market it will receive lots of attention and when the unit is well priced and well marketed it attracts critical mass and can sell at the highest numbers.
We are not in 2015 anymore, so asking outrageous prices will not work. Ask the Continuum Experts for more information about how we market and sell ultra-luxury properties.
Larger, 4+ bedroom units saw 3 sales last year and at the time of this report (April 2020) no sales were reported yet in 2020. The market seems to be on the rise with 2019 showing a peak sales price per SF of $2,520. This might be due to the influx of many wealthy tax refugees. There is demand for larger units, but limited inventory leading to a reduced number of months of inventory for such high-end units. Continuum is showing a balanced/sellers market, which means sellers have a slight advantage over buyers. Units stay on the market for almost a year on average while well priced units are mostly sold within half the year.
Advice for Buyers
As we mentioned already in the previous section, this is a seller’s market and good units move fast. Come with serious offers, because the good ones are sold quickly these days. Because it is a seller’s market does not mean you have to overpay for a unit. Please know the price ranges at Continuum and do not pay top dollar for a standard, original unit. Call us for more details at 305.508.0899 or use our price guide for a better educated start of your search.
Advice for Sellers
This is a great moment to get top dollar for your unit. With that said, it is important to recognize that buyers are better educated than 4 years ago and we do not see outrageous amounts anymore for units that do not justify these amounts. Please price your unit according to market prices (which are impressive enough) and make sure you market it right. As mentioned before, the first months a unit is on the market the exposure is the highest and those who take advantage of this momentum will definitely sell fastest and best.