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Analysis: Sales picture brightens for PB condos

Posted On: 09-05-2015

By Darrell Hofheinz Daily News Real Estate Writer

Palm Beach condominium sales outperformed those of single-family homes in terms of prices and transaction volume during the first half of the year, according a new analysis of transactions.

Townwide, 258 condominiums and co-operative units changed hands between New Year’s Day and June 30, compared to 221 for the same period last year. That’s according to the latest Evans Report prepared by Leslie Evans, a real estate attorney who also owns property on the island.

The brightening condominium picture likely reflects the fact that the market for condos was much slower to recover from the effects of the Great Recession than the market for houses.

“We had a huge supply of condos, particularly in the South End,” acknowledged Clive Stuart-Findlay, president of the Palm Beach Board of Realtors and a real estate agent with Fite Shavell & Associates.

Median condo prices for the first six months also were up significantly — from $485,000 in 2014 to $645,000 this year. The median is the price at which half sold for more and half for less.

More condo sales also recorded at $1 million or more during this year’s first half — 75 during the first six months of this year versus 52 last year.

“We’ve burned through all the junk,” said Evans. “Now the condos are selling at much higher prices.

”Better prices and more sales were recorded on both sides of Sloan’s Curve, the traditional dividing line between the South End’s Condo Row and the typically higher-priced units in Midtown buildings.

Last year during the first and second quarters, 121 condos traded on the South End, whereas this year, that number jumped to 146. More Midtown units also traded during this year’s first half — 112 versus 100.

Broker Scott Gordon, whose eponymous agency specializes in South End sales, said the numbers in the report confirm the experiences of his agents and their clients.

“It was really a great season,” Gordon said, adding that the recent harsh winters sent many Northerners shopping for Palm Beach condos.

“Given the past two winters and the recovering real estate economy, there’s been a huge demand,” Gordon said. “Last season, a number of renovated apartments appeared on the market, and we did a lot of transactions (at higher prices). It was really the missing piece of the puzzle.

”Single-family inventory

The numbers were less robust in the single-family category, where sales volume continued to be hindered by what Evans called “historically low inventory,” which has frustrated house-hunters.

Many homeowners have shown little interest in putting their houses and townhomes up for sale, while the supply of new houses developed on speculation hasn’t kept up with demand, according to Findlay and other real estate observers. The single-family category also includes vacant land sales.

“The numbers do reflect a shortage of product,” Findlay said.

Total year-over-year sales of single-family sales during January, February and March were flat, with 43 properties changing hands both years. But sales dropped significantly at the tail end of last season: Transactions in April, May and June fell to 50 this year from 64 during the same months of 2014.

Year-over-year median single-family prices, however, rose to $3.5 million from last year’s $2.95 million. In the second quarter alone, the median increase was more dramatic, from $2.975 million in 2014 to $3.375 million this year.

The median prices likely would have been higher if there were more new or updated single-family properties on the market, Evans said.

“Those would be more expensive, but they’re just not available now,” he said.

Neighborhood breakdowns

Midtown saw a modest increase in first-half single-family transactions, from 11 sales last year to 13 this year. Median prices there also rose slightly this year, from $2.45 million to $3.2 million.

But the number of single-family deals was down, year over year, in the town’s two other designated areas during the first half.

On the North End during 2013 and 2014, buyers burned through inventory, leaving more recent house-hunters to fiercely compete for what was left. In all, the first and second quarters of this year saw 26 North End sales, down from 34 sales last year. But median year-over-year North End prices were up, rising from $2.89 million in 2014 to $3.14 million.

On the South End, the number of single-family transactions recorded during the first half of this year fell to 11 from 19 in 2014. Median prices on the South End also dropped, from $6.55 million to $4.35 million.

“There just weren’t all that many large estates for sale on the South End,” Evans said.

Even so, the South End did see an undisputed whopper of a sale in March, when landmarked Casa Apava at 1300 S. Ocean Blvd. changed hands privately for $71.2 million, marking the third largest single-family home sale ever on the island.

“There are always outliers,” Evans said. “That’s why I prefer the median price to the average price.

”Off-market deals

The tight inventory for single-family homes may be having another effect. House-hunters who can’t find a detached house may opt, instead, for a condominium, boosting those sales, said attorney Jason Evans, who works at his father’s Brazilian Avenue law firm and helps compile the report.

Unlike other sales reports prepared by real-estate agencies that use data solely drawn from the local Multiple Listing Service, the Evans Report includes every Palm Beach transaction recorded by the Palm Beach County Clerk’s Office. That includes the off-market sales that have long been a feature of the local real estate market and have multiplied, some observers say, in light of the recent tight inventory.

The report and an archive of the firm’s previous reports can be viewed at LREvansPA.com.



Source: Darrell Hofheinz, September 5, 2015, Palm Beach Daily News

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