Miami-Dade's existing condo sales in May were up more than 70 percent compared with the same month last year. Backed by a multibillion-dollar private equity firm in New York, a team of Miami investors and strategists launched Lionheart Capital this year looking to scoop up choice South Florida condos at rock-bottom prices.
In its first deal, the firm plunked down $120 million this month to buy up 146 units at the 2700 North Ocean Drive towers on Singer Island in Palm Beach County.
It marked the 50th bulk condo purchase in South Florida in the last two years, according to analysis by Peter Zalewski, a principal of the real estate consultancy Condo Vultures.
New figures released Tuesday by the trade group Florida Realtors indicate that investors like Lionheart may be getting into South Florida's fragile condo market at an opportune time -- but they also could be in for a long wait before condo prices return to pre-recession levels.
Single-family homes prices may have already begun to rise, with prices increasing for the second month in a row in Miami-Dade and Broward counties, the Florida Realtors' report found.
Miami-Dade's existing condo sales in May were up more than 70 percent compared with the same month last year, with 972 units sold. That's an increase of 34 percent over April. But with plenty of inventory still on the market, condo prices were still down, dipping 10 percent to $126,100, the trade group's report found.
In Broward, median condo prices increased for the first time in more than three years, rising 1 percent to $81,500 in May. Year-over-year sales were up 21 percent to 965.
``We've seen a decline in inventory and increase in sales, and when you've got those two graphs going in a positive direction, it's a good sign,'' said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors.
With signs of improvement trickling in for South Florida's beleaguered housing market, investors that have large piles of cash at their disposal are seeking bulk deals, with plans to flip condo units for a profit post-rebound.
Options are limited for prime downtown Miami and Miami Beach locations, so many bulk buyers are being pushed to consider deals farther north, with Palm Beach County in the spotlight, Zalewski said.
Ophir Sternberg, managing partner of Lionheart Capital, said the choice to buy units at 2700 North Ocean in bulk allowed the investors to get a competitive price while the market was still down. The company is looking at other bulk deal options in South Floria, Sternberg said.
``We've been intensively searching the South Florida market for about a year for a high-quality oceanfront deal,'' he said. ``When we found this one, there was nothing better in terms of quality and location.''
Lionheart paid about $250 per square foot in the bulk purchase, about $803,500 per unit.
While only 96 of the 342 units in the luxury towers have sold in the past two years, current condo owners at 2700 North Ocean paid an average of $1.47 million per unit, or $520 per square foot, the Condo Vultures report found.
Sternberg said he planned to take some time to study the property, then begin a new marketing campaign in the fall to start filling the units.
In the last two years, bulk buyers have bought up more than 4,800 units in South Florida, paying a total of about about $1.5 billion, the Condo Vultures report shows.
These bulk purchases tend to boost sales numbers but keep median prices down, since they are often bought at a discount.
In Miami-Dade, year-over-year home sales were up 22 percent at 727, and the median home price increased by 1 percent to $196,700.
In Broward, sales were down 6 percent compared to May 2009, but prices rose to $216,400, a 14 percent increase compared to last year.
Florida's single-family home sales also showed some positive signs in May, increasing 18 percent over the same month last year. Median prices, however, dipped 2 percent to $140,400.
Nationally, single-family home sales increased 19 percent over the year, and median price was $179,600 in May, up 2.7 percent from May 2009.
But Zalewski, who monitors local transactions on a weekly basis, says there is reason to be cautious about the state and national numbers, which are lagging indicators.
More recent reports by his team found that the inventory of single-family homes, town houses and condos on the market has been increasing in South Florida for the past three weeks, a strange turn after nearly two years of steadily decreasing numbers of homes for sale.
It could be a signal that homeowners who are not in foreclosure but have been waiting patiently for a rebound, may be beginning to put their homes back on the market. If inventory continues to increase over the next few weeks, it would be an ominous sign that the industry is headed for a stalled recovery, Zalewski said, emphasizing that additional inventory could keep home prices down in the months ahead.
``If we have six weeks in a row of [increasing inventory], we could be in trouble,'' he said. ``This might be a sign of a double dip.''
Source: http://www.sun-sentinel.com/business/sfl-condos-bulk-buying,0,1020170.story
By TOLUSE OLORUNNIPA
The Miami Herald
The Criscitos has been selling South Florida luxury and commercial real estate for over a decade and has sold over $1 billion dollars of property. They work as a multi-lingual team speaking english, Spanish, Italian and Portuguese. They carved out a niche as a leading boutique real estate company with two distinct divisions -residential and commercial- both personally overseeing by Marcela and Anthony Criscito.
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