How long will it take for the Miami Condo Market to Recover?
The Miami Condo Market – When is a Good Time to Sell?
We often get the question: “How long have we got before the Miami condo market goes back to normal?”. This is a frequently asked question from worried condo owners and potential buyers. With “normal” they refer to the price level from when they bought their condo, which was often in the peak years between 2009 and 2014. What owners really want to know is when they can sell their Miami condo for at least the same amount of money they have invested in it. Many don’t want to hold on to it, but at the same time are worried they will loose money when they sell under current market conditions.
How long will it take to absorb recent condo inventory?
The time it takes to absorb the current condo inventory varies per neighborhood. The Grove is completely different to Miami Beach or Brickell and Sunny Isles differs from South of Fifth. With other words; do not generalize the Miami condo market, but rather look at the individual neighborhoods.
The below tables provide you with the current months of inventory and absorption rates. These rates are based on today’s economic climate assuming everything stays as – is.
How to Interpret these absorption rates?
Can 4 years of inventory still change? Yes, it can. As mentioned before these rates are based on today’s situation and we cannot predict the future. When I started in 2008, we were experiencing a downturn market and we were looking at about 7 or 8 year of supply or absorption time, which brought everyone to panic. This inventory then got absorbed in 18 months!
What happened? The condo prices were lowered considerably to levels which made it attractive for buyers to come into the market. This new demand led to an increased amount of transactions and a rapid decrease of inventory.
So the indicated absorption times can be positively or negatively affected by future price changes as well as by future developments in our economy. It is important to understand that with current absorption rates it takes a certain period of time to sell all inventory, but if the same happens today as in 2009 and prices will be lowered, this absorption time will decrease in a faster pace and 3 years might become 12 months.
When Should You Sell your Miami Condo?
In order to give an adequate answer to this question I will have to look at your situation and your property. If you ask the right amount per SF you will sell very fast in this market, but we understand you do not want to loose money when selling.
I always help clients calculate not just how long it will take to sell, but also the cost of holding on to your unit. It is important to know your carrying costs (taxes, insurance etc) and what you could potentially earn if you would invest that dollar in another property. Many people focus so much on a specific sales price and not losing money that they forget to calculate the accumulating carrying costs and missed investment opportunities.
If you have bought before the peak of the market or in a stable market that does not have much inventory, you should not worry too much. As a seller you should get a good market price now and if priced correctly it will sell quite fast.