Developers at six newly proposed condominium towers in the tri-county South Florida region have signed more than 500 pre-construction sales contracts and reservations, an indication that the market there has returned in a big way.
The commitments account for nearly half of the 1,150 units in the proposed properties, according to a survey of planned developments in Miami-Dade, Broward and Palm Beach Counties by CVR Realty.
“Buyer demand for the newly proposed condo towers appears to be stronger than most people would probably think given today's economic climate and remaining unsold developer inventory from the last South Florida real estate boom,” said CVR broker Jenny Huertas.
An additional 14 projects with more than 3,000 units have been proposed for the South Florida area but have not yet begun pre-sales, according to the report.
Meanwhile, ground has been broken on the third of the 20 high-rises, this one a 70-unit tower in Aventura. The other two that have started construction are in Hollywood and downtown Miami.
Developers are banking on overseas buyers with plenty of cash and the prospect that Las Vegas-style casinos will soon be allowed in the region, according to CVR Realty. They are moving ahead despite an inventory of about 4,700 units as of the end of the third quarter that remain unsold from the last real estate boom.
Developers of many of the proposed properties are trying to secure construction financing, itself an expensive challenge. But to appease fearful lenders, most are requiring buyers to commit to deposits, to be paid in phases, of as much as 80% of the preconstruction contract price, industry sources report. During the last South Florida condo boom, preconstruction buyers were generally asked for deposits of about 20%.
