By Dawn Wotapka Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–South Florida’s bloated condominium supply is finally being whittled down, a positive sign for the region that saw one of the nation’s most spectacular booms and busts.
But inventory under construction and, of course, foreclosures, could erase the recent baby steps toward recovery.
Falling prices combined with pent-up demand pushed the number of resale condos available just below the 50,000 mark, a decline of more than 18% from November, according to real estate consultancy Condo Vultures LLC.
“It is significant psychologically for the region to see the condo resale inventory slip below 50,000 units,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based firm. “Before the South Florida condo market can stabilize the overall inventory must first be reduced.”
As of this week, there is a combined 49,746 condos and town houses on the resale market in the tri-county South Florida region, stretching from West Palm Beach to downtown Miami. That’s down from 51,581 about a month ago, according to Condo Vultures, which uses data from the Florida Association of Realtors.
In November, there were 60,928 condos for resale.
The largest concentration remains in Miami-Dade County, where developers raced to build luxury waterfront condos during the region’s heyday. After the bubble popped, the area was saddled with a multi-year inventory glut that depressed prices and fueled foreclosures. Cash had been king recently, but an increase in deals has soothed some jittery lenders and financing is trickling in.
That has helped the Miami area’s condo inventory fall by 18% since Nov. 24, according to Zalewski.
But this could only be a temporary improvement. Developers could unload another 10,000 or so new, unclosed units into what, despite modest improvement, remains a battered housing markets.
Foreclosures, Zalewski added, continue “at a rapid pace.”
-By Dawn Wotapka, Dow Jones Newswires; 201-938-5248; dawn.wotapka@dowjones.com
