With the crisis triggered by the pandemic, some neighborhoods in Miami are facing an increasing resale movement in the segment of very high-standard real estate. This is the case of beautiful Sunny Isles Beach, an island north of Miami, home to some of the most luxurious condos in the world. With the owner’s resales of their newly purchased apartments for sale, the developers started to face competition with their own customers, since they are not sold out yet.
Gil Dezer, from Dezer Developments, in an interview with the Miami Herald, said to have been competing with resales for the last two years. Some units at Porsche Design Tower have sold for $1 million less than what the original buyer paid two years ago, Dezer said. Dezer is responsible for the main luxury new constructions in Sunny Isles Beach. With a deep knowledge of the South Florida luxury real estate market, Dezer does not intend to lower prices. He is willing to wait!
Like Dezer, other developers in Miami also understand that the moment is for patience. “Of course, during the pandemic, many people lost their jobs or needed to close their businesses. Resales became the only solution for many people who are in desperate need of money now, ”says Carlos Barros, international investment consultant in Brazil and partner of AMG Realty in Miami. Carlos understands that they are occasional sales, exception. “As soon as these units are sold and leave the market, prices tend to come back,” he adds.
This is what happens with some high-end beachfront condos in Sunny Isles Beach. 3 units at the Porsche Design Tower were put up for sale on the market, suddenly, with considerably depreciated prices. Experienced investors know that these prices do not reflect the market. “Keeping the sales price at normal market levels helps to sell the depreciated units faster and, therefore, remove them from the sale list”, recommends Carlos. “Just be patient that the pandemic will soon pass, cheaper units leave the market and prices come back,” he suggests.
Fisher Island, famous for being one of richest zip codes in the world, face the same situation. The last condo delivered on the island, the Palazzo della Luna, offers units with prices 40% lower than the initial offer.
Developers consider implementing blocking period to avoid resales
Situations like this of the coronavirus can permanently impact the real estate market. Developers are likely to opt for projects with a smaller number of units. Thus, in times of crisis, they do not have an inventory so high to drain. In addition, a blocking period for buyers is being considered. With the blocking period, buyers would be prevented from reselling the units for a period of 12 to 18 months after purchase. This practice is not yet common in Miami.