StatFunding Press Release

StatFunding Releases January 2017 Miami Preconstruction Condo Market Snapshot

January 26, 2017

StatFunding issued its January 2017 Miami Preconstruction Condo Market Update today. The Miami preconstruction condo market moves into 2017 with an increase in underwater condo sellers, more underwater closed sales, a huge build in inventory in the condo market as a whole, and an increase in developers stuck with unsold units.

From November 2016 through January 2017 condo flippers took big losses to exit their units, including a $4.75 million loss on a $16.5 million preconstruction condo purchase at the Faena House project. In what may be indicative of current stress, and what could lead to future stress, is the build in unsold developer condo inventory. The developers of Miami condo projects including Echo Aventura, Crimson, Centro, Bond, and Grove Grand Bay appear to have completed their sell-throughs with remaining developer inventory. The developer of the two tower Brickell CityCentre Project appears to be stuck with the largest amount of unsold inventory with 48 unsold units in the Reach tower, and 217 unsold units in the Rise tower, totaling 33% of the project unsold.

In Miami-Dade County 10,000+ additional units are currently in construction and will be delivered within the next 24 months. Over the last 3 years inventory of resale condos listed for sale has increased from about 8,000 units to over 14,000 units, and transaction volume is down about 30% year over year. “In May 2016 we released our first Preconstruction Condo Market Update. At that time we noted the obvious pressure building in the market, which resulted in condo flippers selling units for a loss and sellers listing their condo with prices that would result in losses for the seller. The data indicated that the trend would likely continue with the massive amount of inventory coming to market in a short period of time. Unfortunately, the data indicates that our prediction was correct,” noted Andrew Stearns, founder and CEO of StatFunding.com.

“The inflection points of previous condo cycles have been marked by developers getting stuck with unsold developer units. It looks like we may be experiencing the same thing all over again,” commented Stearns.

The data in the StatFunding Market Update indicates that we appear to be in the early stages of a distressed preconstruction condo market. Based upon available data, the next 24 months will likely see the distress continue and increase.

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StatFunding.com is a platform that allows individual and institutional investors to take fractional or whole participations in commercial real estate loans. StatFunding periodically releases internal reports on market conditions, which are widely considered to be the most in depth and accurate analysis of the state of the Miami condo market.


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