South of Fifth Condo News and Market Trends 2018

The South of Fifth Condo Market in 2017 and Our Expectations for 2018!

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The South of Fifth condo market is very unique. The luxurious condos sell the Miami Beach lifestyle and the area has always been in great demand because of its location and superb views. However, most of the South of Fifth condos have experienced price corrections in the last few years. Reason enough for the David Siddons Group to examine the 2017 market and to look forward to 2018.

Prices and Price Changes in the South of Fifth Condo Market

In the table and graph above we provide you with the sales prices per SF for South of Fifth condos in 2017 and we compare these prices with previous years. We added a graph with trend lines, which provide you with a better insight into the direction of the market. As can be seen from the trendlines, prices in some of the submarkets are stagnating, with the $3M to $5M range even seeing a downward price trend. After a few years of extreme high prices the market is now seeing price corrections in order to stabilize the market.

Because the South of Fifth market offers a wide variety of condos we also highlighted the most desired condos for you to show their performance over time. As can be seen from this table almost all of South of Fifth top condos are seeing price corrections. They showed great prosperity till 2015, but the prices started to stabilize from 2016 onwards.

The graph and the table below indicate the months of inventory and this might be the most important indicator in the real estate industry.  Months of inventory show you the supply and demand relationship, which is key in predicting future price changes. As you can see from the tables, the South of Fifth Condos market is seeing high numbers of inventory. With the current rate of absorption it will take up to 4+ years for the higher-end of the market to be absorbed. Of course this might go faster or slower depending on the overall economy or sudden changes in demand.  However based on today’s circumstances we are looking at 4+ years for the $3M+ market to be absorbed and between 1,5 and 3 years for the rest of the market to be absorbed.

What does sellers or buyers market mean?

• A sellers market (With 6 or less months of inventory – and 12 or less months in the Luxury $1M+ market) means that there is more demand than supply, mostly leading to an increase in prices and providing sellers with an advantage.
• A buyers market (With 9 or more months of inventory – and 18 or less months in the Luxury $1M+ market) means that there is more supply than demand. Prices are likely to decrease in order to absorb the supply.
• A neutral market provides for a perfect balance in which neither party has an advantage and prices are likely to remain stable

The South of Fifth Condo Market in 2018

With high inventory and with more price-conscious buyers than in previous years, prices will need to come down. Our agents are noticing a decline in the amount of showings and buyers think the current market is overpriced, therefore more hesitant in making a final decision. Sellers need to be at market value if they want to sell and buyers need to be careful not to overpay. We see many luxury products on the Beach sell for 25% less then their asking prices (one of the tables below shows the average discrepancy between listing and sales prices per price range). Many sellers piggyback on the success of surrounding condos or the name of the area and ask for prices that are not in line with the unit they offer. When buying a South of Fifth condo please look at the value of the unit and not the value of the overall market. The table below this paragraph shows you the lowest, average and highest prices per SF paid in 2017. This is a good starting point to know whether a property is overpriced or not. The South of Fifth market has seen a large influx of brand new luxury condos. Many of them are low-rise boutique condos on a dry lot asking the same price per SF as the established waterfront condos. These condos were established in the height of the market and will most likely see a decline in value.

The table below shows you the difference between the original listings prices and the sales prices. Overpriced units tend to be longer on the market and show a much higher discrepancy between sales and listing prices. This means that in the end, those units only sell when prices are adjusted to market levels.