Last year brought a big change in Brickell’s real estate market. As recently as 2014, the Brickell area was touted as the fastest growing hub in Miami with international buyers coming in large numbers to purchase preconstruction condos and resale. The upward trajectory continued until the summer of 2015 when struggling Latin American economies began to impact sales in Brickell. A rapid increase in inventory and resulting price reductions exacerbated the decline.
For the past half year, the Brickell real estate market has averaged 27 months of inventory, far above the 18.5 month average over the same time period a year ago. A well-balanced market typically has six to nine months of available inventory. Given the number of new preconstruction units, inventory is sure to rise even higher. In 2016, Brickell we will see the completion of Brickell City Center, SLS, Bond and Brickell Heights. These developments alone represent a total of 2,248 new condos – including Panorama, a new rental building.
According to EWM realtor David Siddons, condo owners in Brickell may want to consider selling – but only if the unit is valued at $550 per square foot or higher. In a recently authored article for the Miami Herald, he recommends investing in a Brickell condo if the price is under $400 per square foot. That leaves those who own a property between $400 and $550 per square foot in somewhat of a predicament – to hold or not to hold.
In any case, if your unit has outstanding qualities – such as high ceilings, amazing views and large terraces, or unique amenities like fully-equipped fitness center and spa, or on-site world-class restaurant, then stay where you are. High quality towers, such as Bristol, Santa Maria and Carbonell with breathtaking water views will withstand any market correction.
Along with the increase in preconstruction units, expect to see a rise in the number of rental buildings. As more people consider moving to Brickell, many are not yet able to make the financial commitment to purchase a property. Many young professionals are drawn to the area because of improved public transportation, new restaurants, nightlife, and high-end retailers. In all probability, a significant portion of these rental units will be absorbed back into the resale market.
Looking forward, developers are doing their best to secure the prime – and increasingly scarce – parcels that may still be available. Meanwhile, purchasers are negotiating to have first choice of units with the best views and lower preconstruction prices.
Brickell may soon be unrecognizable given the new landscape and changing skyline, but it remains an ideal place to call home for many.