Two interesting ways to compare what’s happening at these different locations is to compare the absorption rates and the percent of the total units in the building that are for sale. I am not looking at Sales Price, Cost per Square Foot or other measures in this analysis.

The absorption rate chart below indicates how many months of inventory exist in each building based on the rate of sales made in the previous six months. For example, the Courts at South Beach has the lowest absorption rate of just 4 months of inventory, based on the number of recent sales. The Portofino Tower, on the other hand has a 62 month inventory because just 3 units sold in the past six months while 31 are on the market today. Conventional wisdom says that an absorption rate of 6-9 months reflects a balanced market between Buyers and Sellers. Anything less than 6 months reflects a Seller’s market, anything more a Buyers market. In addition to the Portofino’s numbers, Murano has a large 42 month inventory and Continuum North Tower a 31 month Inventory, and all three are greater than the 23 month average for the whole South of Fifth neighborhood.

SoFi Absorption Rate Chart

Five other buildings, Continuum South Tower, Cosmopolitan, the Yacht Club, Icon, and Murano Grande have absorption rates ranging from 15 to 19 months, and along with Apogee and the Courts at South Beach are doing better than the neighborhood a whole.

It is interesting to note that in these 10 buildings there is 62% of the South of Fifth inventory today, and these sames building represented 72% of the sales over the same period.

The other measure I was looking at was the percentage of the total number of units in the building that were on the market. Again there is a big disparity from the 2% figure at the Courts to the 28% figure at Continuum North Tower. I think even 10% is a large percentage of a building to be turning over at any one time, but the number can be interpreted differently based on the absorption rate of the property.

% of Building for Sale

Only 2% of the Courts at South Beach’s total units are available for sale today (3 of 195), while as high as 28% of the Continuum North Tower’s units (57 of 203) are available. The other 8 buildings are closely packed with between 9 and 16% of their building’s total units on the market.

What if you need a large unit and want the South of Fifth neighborhood, but can’t afford the price of these luxury condos? Is there an alternative? At The Courts at South Beach, there is! The Courts is not a high rise, and it does not valet parking or a dramatic lobby with concierge. What it does have is 195 uniquely designed residences in a 4-story Mediterranean-styled complex with two pools, a gym, a community room, and two raquetball Courts. It is becoming a preferred destination for young families because of the affordable costs of the units as well as the low maintenance fees which are about half that of larger buildings.

Available for sale is a large unit with 4 bedrooms and four full baths and a two-car garage in the main section and a separate fifth bedroom and fifth full bath and private entry. In total there is more than 2500 SF of living area. What makes this unique is that it is the only 4-5 BR unit on the market in the South of Fifth area for less than $2,000,000. In fact it is on the market for $995,000. It is a two story unit, but the rooms are located on four distinct half-levels, creating some double-story ceiling heights and a sense of even greater space. Access is through the unit’s private garage, private gated entry or through Security at the main gatehouse.

Enter into the Living Room with the Kitchen and Dining areas at the other end of a large open space.  The bedroom is in the rear of the unit, separated from the Living space by a full bath and a closet.

Low maintenance fee of $170.00 keeps the cost of ownership low.

Located in the Cosmopolitan, and centrally located just a few blocks from the Ocean and the Marina, this South of Fifth location is desirable for is urban residential flavor, where it is possible to walk to the best restaurants, enjoy the spectacular new South Pointe Park, watch the Cruise ships go out while  strolling on the Bay walk.

This unit enjoys a private setting overlooking the pool and the Grand Piazza. It features 3BR/3BA and 1,485 SF of interior space.  The polished Travertine floors extend throughout the unit, the kitchen features stainless appliances and granite counters, and the windows have been enhanced with the installation of Plantation shutters.

The Courts has the feel of a Mediterranean Village with its distinct architecture and low density design.  It features two pools, and a hot tub, a gym with recently purchased new equipment, and steam and sauna facilities, and a raquetball court.  Unlike at the high-rise buildings around it, residents at the Courts park their own vehicles and take an elevator or walk directly to their unit (there is no lobby).  This is a desirable feature for those who live here, and helps to keep the maintenance costs down as well.

FOR SALE:  $699,000

FOR LEASE: $3,700/mo. FURNISHED

EASY TO SHOW

On one hand, The Courts at South Beach has been on fire with sales, closing 9 of 15 listings in this first six month period, while Murano Grande and Icon have been ice cold, closing just 4 of 55  and 4 of 52 listings respectively in this same period. In the case of the Courts at South Beach those sales figures would suggest that the six units currently on the market will be sold in the next four months, while the  figures at Murano Grande and Icon predict an inventory of units that could take in excess of six years to sell.  Here’s what the comparison looks like for ten of the more popular South of Fifth developments.

The first chart  lists the ten selected developments and the Sales experience for the first six months of the year in each, compared to the number of units currently on the market in each building. The developments are ordered by the absorption rate for each building; that is the assumption of how long it would take to sell the current inventory based on the last six month’s sales.

The chart below displays the absorption rates of each building in a way that more clearly demonstrates the variance among the selected developments. When evaluating absorptions rates, smaller is definitely better.  As you can see, the Courts is on track to sell its current inventory in 4 months (Our Listing at 100 Meridian #221, currently pending sale, will contribute to that statistic).  Units at the Icon and Murano Grande will not be sold out for six years based on the recent pace of sales and the number of units currently available.

Unit #19 is being offered at $595,000, while unit #11 is asking $479,000.  The difference is in the details.  Unit #19 was recently purchased for $560,000, at which point the owner gutted the property and completed a major renovation.  Unit #11 has been owned by the same family for a number of years, and while they have made a few upgrades it is not as finished as unit #19.   The owner of unit #19 believes there are $100,000 worth of improvements that a new Buyer can immediately begin to enjoy without having to deal with the financial, construction, permitting, and scheduling problems a renovation project can entail (while you’re paying the mortgage and taxes and maintenance fees).  The owner of Unit #11 believes they have a well-priced unit in a desirable, boutique community that a new owner can still comfortably move right into and consider making upgrades in the future.

For comparison, unit #8 sold for $480,000 on April 1, 2009.

To some it means the least expensive property available in the neighborhood.  In this case there are five listed properties that qualify as follows:

1. 325 Meridian Av. #11              $479,000
2. 300 Meridian Av. #7                $549,000
3. 730 3rd St. #203                    $739,000
4. 100 Jefferson Av. # 10015        $749,000
5. 100 Jefferson Av. #10014         $799,000

To others, the best deal means the most expensive properties, because  assuming that everything went down an equal percentage, the dollar value actual savings is greater on the more expensive properties than on the less expensive ones.  The five most expensive properties currently listed are:

1. 120 Ocean Dr. #UPH                             $ 14,350,000
2. 100 S. Pointe Dr. #1804                        $  8,395,000
3. 120 Ocean Dr. #LPH                              $  6,950,000
4. 50 S. Pointe Dr. #3204                          $  6,500,000
5. 800 S. Pointe Dr. #501                          $  5,900,000

If we looked at the cost per square foot for the units, the five lowest units would be as follows:
(Portofino Tower unit #505 at 300 S. Pointe Dr. is a surprising addition to this list)

1. 300 Meridian Av. #7                     $308/SF
2. 100 Jefferson Av. #10015              $358/SF
3. 300 S. Pointe Dr. #505                 $363/SF
4. 325 Meridian Av. #11                    $368/SF
5. 100 Jefferson Av. #10014              $370/SF

In contrast, the highest cost per square foot units are as follows:

1. 120 Ocean Dr. #UPH                       $4,276/SF
2. 100 S. Pointe Dr. #1804                  $2,018/SF
3. 120 Ocean Dr. #LPH                        $1,936/SF
4. 1000 S. Pointe Dr. #3702                $1,872/SF
5. 800 S. Pointe Dr. #2002                  $1,855/SF

As expected, the smaller units in the more modest developments with fewer amenities sell for the least amount of  money.  Buyers get the advantage of being in a more expensive neighborhood but do not pay the premium prices.  On the other hand, the most exclusive units have all the amenities conceivable and are in the most exclusive locations and with the best views.

Which one is right for you?  In the South of Fifth neighborhood there is almost a $14,000,000 gap in the list prices, a cost per square foot difference of close to $4,000, and some thirty-five stories above sea level setting them all apart.

The unit below, while not included in the categories above is  a particularly good value.
Courts at South Beach

This is a great One Bedroom in a great location for a great price! Asking just $1,100/month, the unit has been renovated with a new kitchen and bath and the hardwood floors were recently refinished, and new window treatment installed. The unit also features a large corner bedroom, 3 large closets, one a walk-in, a generously sized corner living room, plus a bonus study or dining area.

The location is less than a block from Lincoln Road for convenience, yet the unit is tucked to the rear of the site for quiet and privacy. Washer/Dryer on premises.

Kitchen

Kitchen

Corner Bedroom

Bedroom

Bath

Bath

The flexible floor plan has two bedrooms and full bath on the third level, a Living-Dining area and Kitchen on the main level, and a third bedroom, another full bath, washer dryer and patio on the first level.

We just closed the most recent sale in the complex on April 1, 2009, thus providing a good estimate of value in this market.  That sale was for unit #8, which closed for $480,000. Unit #11 now comes on the market aggressively priced at $479,000. These numbers are 20% below the high prices of $600,000+ three years ago.