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DDA Study: It Won’t Be Possible To Get A Downtown Condo Under $750K By 2025

Downtown Miami’s condo market reached “equilibrium” in 2016, according to a new DDA report, with new construction roughly matching demand.

Prices will likely begin rising again later this year and be sharply higher in years to come, although they may dip slightly in the early months of this year. A downtown condo under $750,000 will be “unprecedented” by 2025, the author of the report claims.

Overall, 2,202 condos were delivered during the year 2016. Another 3,456 are scheduled to be delivered in 2017, with 2,846 to be completed in 2018, and another 1,960 in 2019.

Prices on the resale market fell 7 percent last year, after double digit gains every year for the past five years.

The rental market is also strong. About 1,000 rental units were delivered during the year, and prices were up 1%. Another 4,900 apartments are under construction.

 

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19 Comments on "DDA Study: It Won’t Be Possible To Get A Downtown Condo Under $750K By 2025"

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Anonymous
Anonymous

Which broker paid for this study? I see condos listed in the $250,000 ball park today so if you really believe this nonsense you can easily triple your money in 8 years.

Good luck!

Anonymous
Anonymous

Seriously. I’d like a look at their crystal ball cause I’d like some sure answers for some other investments.

Anonymous
Anonymous

Idiot. Look at San Francisco back in 2008 to now. It’s not implausible to see massive spikes

Really???
Really???

This ain’t SF. We don’t have the jobs to support actual people in all these condos at $750k on the LOW END.

But even if we did it’s already 2017 so were talking about 8 year from now. Right now you can get condos starting at $200k. Some quick math means that condos at the low end would need to go up on average 18% every single year. Heck the average sales price at Centro, a brand new building downtown, is $300k.

Anyone who thinks that is just living in a fantasy world. Their own report says the average $/SF downtown $426. How on earth the MINIMUM $/SF gets up to $1,500 is beyond anyone who can do basic math.

Marc305
Marc305

I see a lot of comments disputing this study, mainly because the article is not very clear. Will the $750K average be for studios or 3 bedroom? My partners and I have been selling exclusively in Brickell since 2009, and the market is so active that we are about to purchase a franchise realty in Brickell Ave. This very small area has a life of its own, currently there are condos as low as $189K but that’s for super small studios with less than 430 sq feet. The bell curve (including only studios to 3 bedrooms) goes all the way to $7 million. If the study includes all of these numbers than yes, the “average” price might very well be that high by 2025. With the cheapest condos starting in the high $200’s and the most expensive going for upwards of $8 million.

Really???
Really???

From the report:

“IRR predicts that the resale market begins to see increasing sales velocity in 2017. This will be a combination of more aggressive sellers, and a buyer’s mindset that interest rates are moving upward, and locking in a downtown apartment in thriving urban area for under $750,000 will be unprecedented in 2025.”

They are saying one of the reasons pricing will start going up aggressively is because somehow people think that getting any condo (on the resale market no less) under $750k will be unprecedented 8 years from now.

I think we can all agree that nobody with common sense thinks this.

Anonymous
Anonymous

Really? Oh…ya

GBA
GBA

Good analysis. What do you estimate the average sales price per square foot will be in 2025?

invasive species
invasive species

i would sell somebody my condo right now for $749,999

Flymia
Flymia

This “study” is comical.

Brickellite
Brickellite

I can see this happening. Not much land left in Brickell. Eventually its all done.

Anonymous
Anonymous

And then it just moves further west and north and south and go home you’re delusional.

Really???
Really???

Downtown is more than Brickell. But starting a quick look on google earth shows over 20+ acres of land that is either vacant or has a 1 – 2 story building on the site. And this doesn’t include things where you have old condos built with huge surface parking lots that will probably be purchased and towers built on the surface lots with connecting garages. And I’m only talking about the area east of the metrorail. Then there is West Brickell, which has probably even more space available. So were talking about room for 50+ towers.

Then there is the actual downtown or CBD, which has land for decades. Then A&E district, Edgewater, Wynwood, Midtown, Overtown, etc.

There is land for Decades of growth.

Anonymous
Anonymous

Dumb report. That may be true for new condos built in 2025 but not for condos that are built before then and even worse 10+ years before they.

Really???
Really???

I can’t even see that happening for NEW condos. Construction pricing simply isn’t going up that much between now and then. Right now the bottom is around $400k (less for Centro because no parking). And let’s be clear were talking about luxury condos. Someone could always deliver a Melo quality building for sale.

The average price, sure. No way the minimum is $750k.

Anonymous
Anonymous

I rent in downtown now, my building is the Met 3, the newest building avail in downtown. They cant even give the apartments away. The rent is so high that they cant rent out the apt…the same problem happening in a lot of other buildings. Most of them are empty as it is. All this new construction happening…who do they think will rent these condos? The millennials? Most of them are still living with their parents in Miami because they have so much student loans and can only find a job that pays 40k tops…. they all move away.

The Oracle of Delphi
The Oracle of Delphi

There will not be a major spike in condo values in the next few years. If anything there will probably be a slight short term dip–nothing like 2008 though. Condo values will remain predominantly steady as the market catches up with recent and incoming development. There remains significant potential for values increasing as Miami’s real estate market is relatively undervalued. Millennials will begin occupying a more competitively priced renter’s market and catalyze future value growth by augmenting social vibrancy in urban environment and further underpin the expanding urban retail sector.

Aj

The article is most likely talking about an average 2 BR in a Luxury building even though it is not specified as such. These are currently selling for between 500K and 650K right now depending on the building amenities and views. So 750K in 2025 is quite possible.

Anonymous
Anonymous

All you need to do is look at the population growth, the way mass transit will play a pivotal role, the ever increase in land and construction costs and the answer is not only plausible but it’s actually undervalued. Sure, we’re not SF or NY but for some mysterious reason we’re one of the top 10 cities where the super wealthy want to invest and have second homes

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