Market bright spot: condos in Dade
THE MIAMI HERALD
….
OCT26, 2010 : As South Florida's shaky real estate market searches for recovery, an investor group's $1 billionbet on the local condominium market is about to be put to the test.
Starwood Capital-led investor group ST Residential -- in charge of more than 1,200 new condounits in South Florida -- launched its ST Miami initiative this month, announcing plans to releasehundreds of new condo units into South Florida's fragile market in the coming months.
Condo sales were the standout figure in the September existing sales report released Monday bythe Miami Association of Realtors.Existing condo sales in Miami-Dade County rose 36 percent in September compared to the samemonth last year, with 833 sales closed. Month over month, sales were down 2.8 percent, despitea 5 percent decline in median prices. In Broward County, condo sales slid to 828, down 4 percentfrom September of last year.
Existing single-family home sales continued their descent in September, falling 6 percent yearover year in Miami-Dade, with 582 sales. In Broward, year-over-year single family sales dropped16 percent to 673.
Nationally, the housing market improved in September, with existing sales increasing 10 percentfrom August.
Prices are still falling in many sectors of the housing market, but ST Residential CEO Wade
Hundley said brand new condos have avoided that fate this year, even posting increases.
``Relative to all the other markets in the U.S., Miami is doing well,'' Hundley said. ``We've seenprices increase about 10 to 15 percent since the beginning of the year.''
ST Residential became a major player in South Florida's real estate market about a year agowhen it bought a stake in the distressed real estate portfolio of failed Chicago-based Corus Bank.
In a public-private deal with the Federal Deposit Insurance Corporation, ST Residential boughtinto a portfolio of condo projects that includes Paramount Bay in Miami, Jade OceanCondominiums in Sunny Isles Beach and Tao in Sunrise.
The purchase made ST the second-largest owner of developer units in Miami's downtown condomarket, behind Jorge Perez's Related Group, and the public-private deal gave the investor groupthe flexibility to adjust pricing levels.
ST Residential is ``coming in at a time when prices have stabilized, and they're creeping upwards, in that Brickell-downtown area,'' said David Dabby, a real estate analyst with Dabby GroupAdvisors. ``The market is weak overall, but there's enough acquisition activity to begin movingthat [developer] inventory.''
Dabby noted however, that prices are still 50 percent below where they were four years ago, andnot likely to make significant gains anytime soon, since discounted foreclosures and short salesrule the market.
Distressed properties are responsible for more than half of existing home sales in South Florida,dragging down median prices.
In September, year-over-year housing prices fell nearly across the board, with Broward singlefamilyhomes standing out as the sole exception. The median priced home in Broward sold for
$214,200, up 7 percent compared to last September. Broward condo prices were down 9 percentto $71,600. In Miami-Dade, condo prices fell 25 percent to $99,400, and single-family homeprices fell 2 percent to $188,000.
ST Residential plans to relaunch 530-unit Mint on the Miami River into the market in Decemberand will kickstart sales at the 346-unit Paramount Bay on Biscayne Bay north of the PerformingArts Center next year, pricing units ``at market'' rates, Hundley said.
``We control so much inventory that if we come in at very low price point we could disrupt themarket,'' he said. ``And we don't want to do that.''