Miami Condo Developers Slash Deposits, Raise Commissions Amid Slowdown
In this issue of the Miami Condo Market Intelligence Report™, we discuss the moves being made by Miami condo developers to spur preconstruction condo sales amid a slowdown in deals.
Volume 2025, Issue 21 (Subscribe here)
For this week’s Miami Condo Market Intelligence Report™ newsletter, we examine how Greater Downtown Miami condo developers are responding to a slowdown in presales by slashing buyer deposits to 30 percent and raising buyside real estate commissions to seven percent.
It is unclear if the moves - confirmed by internal research - will result in increased presales as South Florida moves into one of the most unpredictable Summer Buying Seasons since the pandemic.
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Nationally, the country is in a global trade war resulting from President Donald Trump’s Liberation Day tariff strategy of imposing at least 10 percent duties on all imports. The tariff war has generated stock market volatility, U.S. dollar depreciation and rising interest rates.
Locally, South Florida condo listings are at their highest level since 2016 when the tricounty region of Miami-Dade, Broward and Palm Beach was in the midst of a building boom following the economic devastation of the Great Recession.
A key reason for the current surge in condo listings is cash-strapped unit owners are scrambling to unload their units amid rising maintenance fees, hefty special assessments and high insurance rates.
The increased cost of condo living is a result of legislation adopted to shore up Florida’s 28,250 associations since the Surfside tragedy in June 2021 when nearly 100 people died and a $1 billion settlement was paid out to the families of the victims.
A federal investigation is currently underway but the preliminary reports suggest a flawed design coupled with a lack of upkeep by the condominium’s association contributed to the disaster.
The Florida Legislature has taken a number of steps - prompted by insurance companies threatening to withdraw coverage in the state - to ensure that nothing like this ever happens again.
In June 2024, we accurately forecast the current challenges with our warning of an impending 2025 Florida Condo Association Financial Cliff.
The uncertainty in the South Florida condo resale market has drawn a growing number of new-to-market developers to Greater Downtown Miami who are attempting to capitalize on the perceived demand for new units.
Originally, developers required buyers of preconstruction condo units to commit to 50-percent deposits based on the contracted purchase prices. The payments are typically made in installments based on construction milestones being reached.
The reduction in the deposit requirements does not mean preconstruction units will transact at a lower price but rather the buyers simply have to front less cash to developers during construction.
In real dollars, the reduced deposit requirement translates into buyers having to put up about $200,000 less for every $1 million of preconstruction condo units being purchased in Greater Downtown Miami.
Preconstruction condo prices vary greatly but the overall asking price range in Greater Downtown Miami is between $1,100 and $2,000 per square foot.
For context, the average asking price for a Greater Downtown Miami resale condo is about $865 per square foot, according to a report by CondoVulturesRealty.com.
This means preconstruction condos are currently priced at least 27 percent higher than the average price for units listed for resale in Greater Downtown Miami.
For buyers who are considering purchasing preconstruction condo units, it is worth noting that the projected monthly maintenance fees for these new towers in Greater Downtown Miami range from about $1.50 to $2 per square foot.
This means a buyer can expect to pay a minimum of $1,500 per month for every 1,000 square feet of new condo.
For real estate professionals, the commissions now being offered by Miami condo developers have jumped to seven percent from the preconstruction norm of five percent of the contracted purchase price.
In real dollars, the new commission increases mean real estate professionals will now make an extra $20,000 for every $1 million sold. This is in addition to the original $50,000 commission made for putting a buyer into a preconstruction condo unit.
Historically, Miami condo developers prefer to offer incentives like decreased deposits and increased commissions rather than reducing the asking prices of units.
If the market deteriorates further, watch for developers to offer free monthly maintenance fees, unit upgrades and extra parking space privileges.
We are pleased to offer a portion of our research for free to our newsletter subscribers and MiamiCondo.Club readers, providing a glimpse into our insights.
For full access to our comprehensive reports, statistical charts, virtual Monthly Meetings and exclusive MeetUp events, we invite you to join the Miami Condo Investing Club™.
The Club's mission is to foster a community that shares realtime, actionable intelligence on the latest real estate trends, emerging opportunities and trusted service providers throughout South Florida.
Whether you are a Do-It-Yourself (DIY) condo buyer or a seasoned real estate professional, the Club provides invaluable resources, including up-to-date statistics, expert analysis and access to tailored consulting services.
We also encourage you to explore our podcast, available on all major platforms such as Apple, Spotify and YouTube, for insightful discussions and updates.
As always, our consulting, expert witness and buyside brokerage services remain available to you, building on our established reputation since 2006.
For specific information regarding discounted condo resales or bulk deals in South Florida, please visit CondoVulturesRealty.com or contact our office directly at 305.865.5859.
— Peter Zalewski, Founder of the Miami Condo Investing Club™
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This information is intended for general informational purposes only and is based on research, personal experience, and interviews. It does not constitute legal advice, as we are not legal professionals. While we strive for accuracy and completeness, this information is provided on an "as is" basis, without any warranties or guarantees.
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