Well, you think about sunshine and water, too. But you get what I’m saying – real estate is huge in Miami and condos make up the bulk of it.
Basically there are two ways to buy a condo in Miami. You can purchase an existing unit, or you can buy pre-construction.
Each has its advantages, and to talk about them I recently interviewed two experts in the field. Michael Sadov is sales director at Terrazas Miami, and Neil Fairman is President and Founder of The Plaza Group, which is under way on Marina Palms in Aventura.
As for existing units like those at Terrazas Miami, Sadov said the advantage is you can actually experience the unit before buying it, and you can move in immediately if you’re so inclined. But many buyers, he said, prefer an investment and buy a unit with a tenant in place.
Sadov said his investment buyers are purchasing well below replacement cost.
Fairman’s company just topped off the first building at Marina Palms with all of the units pre-sold except for the penthouses. For his buyers, the advantage is pricing.
“Pre-construction sales are always the best deal because the developer wants to have enough sales to be able to go to his bank and get it financed,” he said.
“When you see a pre-construction deal, that’s the best possible pricing you can get.”
The Plaza Group bought the Marina Palms property for a good price during the economic downturn, he said. Therefore, he can offer a top-flight product at pricing that’s about half what you would find on the ocean. Yet you’re still on the Intracoastal Waterway in a project that has a marina.
The market, however, waits for no one, and Fairman said input prices have risen 20% in the 14 months since construction started on the first building.
That’s only going higher, Fairman said, as available units are snapped up marketwide. Of about 20,000 units proposed in Miami-Dade County, only 12,000 are under construction. Of those, 9,000 are sold – many with 50% deposits – leaving only 3,000 units available.
In Miami-Dade, condo unit absorption is 5,000 units annually, he said.
“You will not be able to buy a condo at the price we have today once we go into the ground on our second building. You’ve got about 15 days to get there, then prices are going up seven to 10 percent at the very, very least,” Fairman said.
The pair said big deposits are no problem with the North American buyers they’re seeing, and the Northeast U.S. is again becoming the dominant source of capital. In fact, Miami is a bargain when compared to Manhattan, they said.
Fairman cited a Knight Frank survey of destination cities for high net-worth individuals. Miami ranked 7th globally, and second in North America trailing only New York.
Miami, Sadov said, is a dynamic, cosmopolitan city that is still relatively young in the grand scheme of things. It should offer value for many years to come.
To learn more about Terrazas Miami, visit http://www.terrazasmiami.com/. For details about Marina Palms, visit http://marinapalms.com/.
Click here to listen to the full interview with Michael Sadov of Terrazas Miami and Neil Fairman of The Plaza Group.
