How Did Continuum on South Beach Perform During the Covid-19 Pandemic?
- September 30th, 2020
The Performance of Continuum on South Beach During Covid-19
Unit 3703 at the South Tower just sold in June for $1,903 per SF. The 3 bedroom unit sold for $6.2M, after a $2.7M (30%) price cut from its original $8.9M listing price. We mentioned this unit several weeks ago in a blog about great deals at Continuum. Although this is an original unit it is hard to come by such a high floor corner unit with unobstructed water views. Definitely a really great deal!
The Impact of Covid-19 on the Miami Condo Market
The Miami condo market has been struggling since 2013 with declining transaction volumes and sales prices per SF. Continuum on South Beach however remained a strong condo with a healthy demand and some very strong sales. Specially the larger 3+ bedrooms performed very well as relocation buyers from the northeast were looking for high-quality condos with sufficient indoor space and superb amenities near the beach.
When the pandemic started, an event none of us saw coming, the Miami real estate sub-markets were affected in different ways. While the single-family home market flourished with a very high demand and decreasing inventory, the Miami condo market got hit hard. The market experienced declining transaction volumes and decreasing sales prices. The reason behind this is because the condo market is more of an investment market, one that relies heavily on outside money and is less of a necessity and more of a discretionary purchase. Living in times of Corona, many buyers are now looking for different features in a property. Buyers realized they need indoor and outdoor space, they want to avoid density and the home office has become more important than ever. These latter features are more commonly seen in a home than in a condo. Furthermore, many of the potential buyers could not travel into Florida or were not allowed into condos because of safety measures. So besides an increased desire for single-family homes, the condo market suffered from travel bans and safety measures making it harder for buyers to come into town.
As you might have noticed I don’t filter my opinion and I rather warn my readers and clients about what is really happening in the market. I highlight markets with high inventory and downward prices, but that doesn’t mean one should not buy. There is actually a lot of opportunity out there and the time to make great deals is now!
Unit 907 at the South Tower sold in May for $2.8M or $1,497 per SF. The 2 bedroom unit was originally listed for $3.5M representing a 20% discount. This unit comes with superb water views and provides for a great deal at a great price.
The Impact of Covid-19 on the Continuum on South Beach Sales Prices
In the graphs below you see the prices per SF and transaction volumes of Continuum on South Beach in the last 14 years. After the market crash in 2009 and 2010 we reached the peak in 2015 and since then the market started to correct again. The graphs support my earlier statements that Continuum on South Beach still had some strong years and that the larger 3+ bedroom units have performed better in the last few years than the smaller units.
At what Price Point Should I Buy to Get a Good Deal?
When analyzing a real estate cycle you have to look for the bottom prices of the previous cycle, which in the case of the Miami condo market is 2012. Will the market reach the prices achieved in 2008/2009? Most likely not, this was a real estate crash and a completely different situation than we are living in today. Also always remember the bottom of the market will always be slightly higher than the last lowest point.
For this cycle we look at prices achieved in 2012/2013. So once we reach these price levels it is safe to say you are buying at the bottom or near the bottom of the market. If you follow this rule you will be safe, assuming you buy a good quality property. As you can see from our graphs today’s prices are higher than those in 2012, but they are at the levels of 2013. This means they are very close to the bottom prices of this market. This does not mean that all properties at this price level are a good buy. This is the average price. Very well-finished ocean facing units will trade for more, while fixer-up units should ask a lower price per SF.
Unit 3303 at the North Tower sold in March for $4.2M or $1,933 per SF. The 3 bedroom unit was originally listed for $4.9M. We mentioned this unit in one of our blogs in which we highlight good quality units. This unit sold with a 14% discount from its original listing price, matching the sales prices of 2013. This is a really good deal as this is a professionally decorated and fully furnished corner residence with superb water views and a very unique floor plan – only available on 4 floors.