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Analysis: Real estate prices still soaring

Posted On: 11-30-2014

By Darrell Hofheinz Daily News Real Estate Writer The island’s turbulent years of boom, bust and recovery have largely become but a memory, a new real estate sales analysis shows.

The number of sales of single-family properties and condominiums during the first nine months of this year are about on an even keel with the same period a year ago, according to the latest Evans Report, released last week by Palm Beach real estate lawyer and property owner Leslie R. Evans.

But sales prices are up, reflecting a sellers’ market where the inventory of available properties remains tight and where buyers have often found themselves in bidding wars.

In fact, the lowest-price categories for both single-family homes and condos are simply evaporating as prices outstrip them. The report shows, for example, that 76 single-family properties changed hands at prices below $2.5 million during the first nine months of 2013. For the same period this year, there were just 56 sales in that price category.

“What you’re seeing is that prices for entry-level homes are moving up,” Evans said in an interview last week. “Entry-level prices used to be well below $2.5 million.

Now, they’re (often) in the $2.5 million to $5 million range. It’s become harder to find anything below $2.5 million.”In turn, the single-family price category between $2.5 million and $5 million saw sales rise 11 percent, the greatest percentage jump of any segment in the report.

“You’ve heard of that phrase, ‘A rising tide raises all boats?’ That’s what’s happening,” Evans said. “It’s supply and demand.

”More big sales

During the first three quarters of this year, 149 single-family houses, townhouses and vacant lots changed hands town-wide for a grand total of about $803 million. During the same period last year, several more property properties sold — 156 — but the overall amount of dollars changing hands totaled just $693 million.

The report’s cumulative single-family pricing data reflects the fact that more properties sold for $10 million or more between Jan. 1 and Sept. 30 this year than during the same period of 2013. Twenty-one sales in that price category occurred this year compared to 11 last year during the months analyzed.

At the top of the price scale, the numbers in the first three quarters were especially notable: Eight homes sold for $20 million this year versus only three in 2013.

On the condominium scene, the trends are similar — 284 condos and cooperatives changed hands in the first nine months of this year, compared to 289 in the same period of 2013. But this year, more condos sold at higher prices, with 30 sales recorded at $2 million or more, according to the report. That category saw just 21 transactions last year.

At the lowest end of the condo price scale, the numbers reveal that buyers were finding far fewer bargains. For the nine-month periods covered in the report, the number of condos that sold for $250,000 or less dropped from 83 last year to 67 this year.

New homes fetch higher prices

The median price of single-family properties that sold during the first three quarters of this year was $3 million, up about $463,000 over the figure for the same period of 2013. The median price is the price at which half of the properties sold for more and half for less.

The report also spotlights how rising prices in the middle and lower ranges have affected sales. In the first three quarters of last year, 33 single-family properties changed hands for between $5 million and $10 million. This year, that number fell to 25.

At least part of the reason for that drop is linked to the limited number of new homes available for sale on the North End and in Midtown. Developers — hit hard by the recession years — are today scrambling to get new houses built on speculation into the pipeline, only to be stymied, in some cases, by rising land prices that might affect their profit margins.

In any case, the new homes that are being built are selling for far more than they did at the start of 2013, said Clive Stuart-Findlay, who will be inaugurated Wednesday as president of the Palm Beach Board of Realtors.

“The entry level of a newly built four-bedroom home on the North End starts at about $6 million, which is much higher than it was just 18 months ago,” Stuart-Findlay said.

Third-quarter numbers

The report also compared third-quarter sales figures for this year and 2013. In the single-family segment, 41 houses sold during the first nine months of this year at a median price of $3.78 million. That compares to 39 sold during the same time frame last year, when the median price was $3.2 million.

In a similar comparison of third-quarter condo sales, the number of deals dropped from 77 last year to 62 this year. But median prices were up nearly 30 percent, from $405,500 in 2013 to $523,000 this year.

Evans and his son, attorney Jason Evans, compile the report using data from public records, media reports and multiple listing services. The analysis differs from others prepared or commissioned by real estate agencies, which solely analyze MLS data. As a result, the latter typically don’t include off-the-market sales recorded by the Palm Beach County Clerk’s office, Evans said.

 

Source: Darrell Hofheinz, November 30, 2014, Palm Beach Daily News

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