Since 2011, when South Florida entered its current real estate cycle, Miami-Dade-Broward and Palm Beach counties have added more than 4,200 units across 56 new condo buildings. By 2022, those figures are expected to have risen by an additional 21,550 units and at least 95 new condo buildings, according to CraneSpotters.com.

Some say the area’s condo market is overbuilt. They might be right.

According to the Miami Association of Realtors, condos in the city are in ample supply, with more than 9-months worth of available units in October. And while prices have steadily climbed alongside inventory (breaking the $200,000 threshold in October), the level of apparent demand is beginning to taper.

Condo sales fell 6.6 percent year-over-year in October, while median days on market rose from 58 to 59 days. It’s not that demand doesn’t exist, but rather that development is outpacing it.

What’s Slated

Last year, developers added 3,050 new condos east of Interstate 95 in South Florida, which, despite the significant production, was still well shy of the 6,400 units previously planned for the year. Of the buildings and units that failed to make their completion date, about 30 new buildings and 2,150 units will still see the light of day (probably in 2016), but for the remaining (about 1,200) the future is unknown. And perhaps it should remain that way.

Already, condo builders in the tri-county area are projecting a hallmark year, with 95 new buildings and over 7,800 units planned for completion by 2016’s end. In the following year, 6,900 more units will be available…and then 3,650 by 2018…and then 800 in 2019 followed by a two-year development hiatus…and then 2,400 more units. By 2022, South Florida is looking at upwards of 22,000 new condo units.

While Miami’s market may very well be capable of sustaining such a vast inventory of condos six years from now, it’s hard to imagine the sector experiencing such a drastic turnaround, when already relatively strong demand for condos is unable to keep up with building.

Will FHA Loans Be the Difference?

The association has loosely linked falling condo sales with FHA loan availability. Of the 8,000-plus condo buildings in the city, only 23 have approval. But with FHA lending limits for a single family at $345,000, it’s hard to imagine more widespread approval making a significant impact when so many condos come in above the lending maximum. For instance, in Miami Beach, the average sales price in Q3 2015 for a condo was $741,000; in Sunny Isles it was $809,000; in Bal Harbour it was $1.2 million; in Surfside it was $544,973; in Palm Beach it was $945,072; and in Miami proper it was $343,324 (just below the lending limit).

Will a newly announced FHA policy, intended to streamline the approval process, make a difference?

“The new FHA policy should broaden the opportunity for South Florida families to realize the dream of homeownership,” said Danielle Blake, senior vice president of government affairs & housing for MIAMI.

If the new policy extends the number of Miami-area condo towers allowed under the FHA lending umbrella, Blake believes it will bring more buyers into the condo market.

“By increasing the number of local condo buildings approved for FHA loans, more consumers will be able to access FHA’s low down payment mortgages.”