How have Trump Condos in South Florida fared after this 1st year as POTUS? A recent article in Quartzy mentioned Trump’s New York properties have now lost their luxury status and with so many Trump-branded developments here in South Florida, curiosity got the better of me.
The report compares the prices of Trump properties to the rest of Manhattan’s luxury condo market, and found that the average prices per square foot (PPSF) in Trump condos have been far below luxury condos in the city as a whole. It concluded that with 9 of 11 Trump condos performing poorly, investment in the Trump property portfolio would be a “middle-of-the-road” decision in 2018.
My research below analyzes Trump-branded condos including Trump Palace, Trump Royale, Trump Tower I, Tower II, Trump Tower III, and Trump Hollywood. The Trump International Beach Resort, a condo-hotel, was left out of this report and while Trump was the developer behind his New York counterpart, the Sunny Isles Beach developments were built by Dezer Development and to some degree, The Related Group using Trump’s brand and name-recognition for what was believed to be at the time of inception, branding advantages representing luxury and quality.
While the Sunny Isles Beach residential condo market has seen an increase in inventory and decrease in condo sales, the Trump-branded properties have been relatively congruent with the other luxury condo towers regarding value fluctuations and trends. Also used in this study were Jade Beach, Jade Ocean, and Ocean Four which are similar and comparable luxury oceanfront condo towers along the coastline of Sunny Isles Beach.
12 South Florida ‘Luxury’ Developments
South Florida TRUMP Developments; 1st Year As POTUS
Months of Inventory considered as the absorption rate shows as being quite volatile. A buyer’s market is considered as having 6 or more months of inventory so to say this is a strong buyers market is an understatement. I will soon report and elaborate on this variable comparing the many Months of Inventory with similar fluctuations during the recessionary period and beyond looking from 2007 to 2017; check back later this month. And while the absorption rate is important to help gauge local market conditions, pricing trends are a better determinant as we will see below.
Inventory seems to fall in the summer months while sales pick up ever so slightly. I reported on this South Florida winter vs. summer uptick trend here as the general consensus believe winter to be the prime time to sell. Regarding selling a home in Miami, it is.
Here we see South Florida Trump developments list price trends dipping & slipping since last year. I do not directly attribute this to Trump being POTUS as much as I do general shifting market conditions, especially in Sunny Isles Beach. This new development cycle has added a multitude of new condo developments and inventory, all the while, our International buyer pool was diminished given the currency discrepancies and power of the U.S. dollar. Many see this trend reversing in 2018 with an abnormal increase in South Florida’s population growth and the U.S. dollar weakening – I will continue reporting on these interesting trends (#ifyoubuildit).
While sold values are as volatile as absorption rates, there are various floor plans and views (ocean vs. bay) that are a determinant for this movement when overall sales, reflecting 3 to 7 each month, include all inventory and other building variables (Atlantic vs. Bay views, 1 bedroom vs. 3 bedrooms, seller motivation & equity, etc.) affecting market values.
This chart below shows an average discount for buyers within the Trump developments an above average 10 to 15% discounts off list prices. It also shows us an above-average time to sell needing over 6 months for a transaction to occur. That “YUGE spike” (said in a Donald Trump voice) we see in September was directly correlated with
that bitch, hurricane Irma!
Are condo values up or are they down? Is the summertime the right time to sell? When is the right time to buy?
Not shown on this graph but important to note, Trump sale price values are up 7% (March 2018) over last year, however, I’ve revised this chart below to show these six South Florida Trump developments over a 5-year span for a better understanding of sale price trends. As we see below, the market peaked right in the middle of 2015 and while inventory increased and values decreased since early 2016, I do believe now and throughout next year offer a tremendous value & opportunity to own in South Florida.
The Biggest Discounts on Trump Developments
“Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” – Sir John Templeton
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Luxury Condos, Unique Penthouses, & Waterfront Homes
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