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Real estate: Expect consistent sales in Palm Beach, especially for single-family homes

Posted On: 10-16-2016

By Darrell Hofheinz

Daily News Real Estate Writer

No doubt about it: It’s been a stressful year for many Palm Beachers, what with jitters about stock-market fluctuations and an uncertain global economy, worries about terrorism domestic and foreign, and fatigue from a presidential election that has sometimes seemed as blustery and brutal as a hurricane.

Oh, and there was a hurricane — or at least the threat of one, as Category 4 Matthew made a pass-by on Oct. 6, leaving minimal damage but plenty of power outages behind.

Is it any surprise, then, that the real estate news over the past year has seen its share of ups and downs, with buyers and sellers sometimes not quite seeing eye-to-eye at the negotiating table?

On the up side, the island saw four never-lived-in houses developed on speculation sell for $30 million or more each during the past 10 months, with the most expensive of those fetching nearly $44 million in March at 1695 N. Ocean Way in a deal handled by Corcoran Group agents Jim McCann and Suzanne Frisbie.

> Early-season blockbusters

The island also has seen a trend of rising prices paid by buyers of single-family homes, even if the actual number of those sales has fallen from 2015 levels, according to a consensus of sales reports. That’s been the case for the past two years, even though historically low housing inventory levels appear to be easing somewhat.

Which leads us, of course, to the down side: The number of condominium sales this year has plummeted after a strong rebound last year from the lingering effects of the Great Recession. Prices paid for condos during the first six months of the year also were down in year-over-year comparisons.

Adding to the condo concerns is a continuing lack of updated apartments, which are much in demand among buyers, especially on the ocean in Midtown.

What might be needed in this mixed-news environment are a few pointers to help buyers and sellers make a little more sense about what they can expect as the new season begins. Discussions with brokers and agents over the past week yielded — you guessed it — some bright spots and some a little dimmer.

Here’s the gist of what you might encounter if you’re house-hunting, condo-shopping or ready to sell.

Trump or Clinton? Just vote, already! Across the board, brokers and agents agreed they’re expecting this season be more active than what they saw sales-wise in the summer and early fall, at least once the sun has set on Election Day, Nov. 8. It’s a psychological thing: “People have been so concerned about the election. After it’s over, people are going to settle down and feel better. I think,” said one seasoned broker. “We’re looking for a decent season. It’s probably not going to be off the charts, but it will be busy.”

More homes are on the market. Buyers will find more single-family properties for sale right now than they have in the past few years at this time.

In all, there are 140 listings of houses, townhouses and vacant land to peruse, according to a search early last week of the Palm Beach Board of Realtors Multiple Listing Service. That compares to 124 in mid-October last year. And the number doesn’t include, of course, properties being marketed privately, which is always an active category in Palm Beach.

There are 16 listings, by the way, in what many brokers call the island’s “sweet spot” of between $6 million and $8 million. That price range poses little resistance to many house-hunters, as long as the property is in relatively good shape. Just a couple of years ago, brokers pinpointed that range at $5 million to $7 million, illustrating how buyers have grown accustomed to higher prices — within reason.

And although the number of listings is up, there’s still a tight supply of better-quality properties – those on the water, newly renovated or, even better for buyers, brand new.

“New” remains a sizable draw. Builders and developers have been working feverishly over the past three post-recession years to funnel new homes into the market to meet the demand of buyers. They’re looking for sizable residences, often with two stories, open floor plans and large windows, developers says.

But the building boom has left many residents — particularly on the North End — fearful that the charm and architectural harmony of their neighborhoods will soon be gone with the tropical wind. The Architectural Commission appears to be taking their concerns seriously, demanding that new homes, whether built by residents or developers, justify their size and appearance.

Early this summer, board Chairman Richard Sammons even acknowledged the commission had “made mistakes” regarding the scale of approved houses that, once built, turned out to be overwhelming in size. “They missed the scale, in terms of the (neighborhood) context,” he said. “But they also missed the human scale.”

Regardless of the controversy, shoppers will find as many as 15 never-lived-in houses or townhouses either completed or expected to finish construction within the next several months. At the top of that list is the most expensive MLS-listed house on the market, an oceanfront French chateau-style mansion completed last year at 1071 N. Ocean Blvd. With nearly 36,000 square feet and a price of $74.5 million, it has been listed for sale since early last year and is in turn-key conditiion, listed with Christian Angle Real Estate.

The least expensive spec home, on the other hand, is a four-bedroom house with 3,140 square feet at 240 Atlantic Ave., priced at just under $4 million and listed by Sned Realty. Scattered among rest are five homes and three luxury townhouses priced in the sweet spot of $6 million to $8 million.

At least three other properties are being marketed with houses that haven’t even broken ground yet. Leading those, pricewise, is 530 S. Ocean Blvd., where developer Peter Wood has plans to break ground this month on a 14,379-square-foot oceanfront spec house priced at $38.9 million by Christian Angle Real Estate.

Calling all bigger-bucks buyers. Need a bit more evidence that house prices have recovered in the years since the Great Recession? An MLS search early this week showed five homes of varied ages priced between $30 and $40 million, with another 10 estates asking between $20 million and $30 million.

Seventeen properties, by the way, are listed in MLS now at above $24 million, about the same as last year at this time.

That’s pretty rarified territory, even for Palm Beach. But even at lower price points — and that’s a relative term — the market would easily welcome more so-called “significant properties” in the $10 million to $15-million range, several brokers agreed. Such houses would have at least six bedrooms and 7,000 square feet on 15,000-square-foot or bigger lots.

In general, prices in Palm Beach have returned to pre-recession levels. But whatever the stated price, there’s likely still room for negotiation, of course, as buyers and sellers continue their quest for middle ground.

That’s especially true for house-hunters who believe that real estate in South Florida, in general, is overheated, as they’ve watched luxury and ultra-luxury apartment buildings rise in Miami and, to a lesser degree, Fort Lauderdale.

Many of those shoppers also have seen the same situation, to an even more striking degree, back home in New York City, where developers have built so many ultra-luxury towers that finding enough super-rich buyers for them is all but a mathematical impossibility at this point.

Such worries, however, haven’t dampened sales at The Bristol, the ultra-luxury condominium tower that broke ground in mid-May on Flagler Drive, just south of the Royal Park Bridge. With about half of its units sold, the building has been marketed heavily to Palm Beach buyers frustrated by the lack of new condominiums on the island. Building “ambassador” Chris Leavitt of Douglas Elliman, the agency handling its sales, didn’t have updated total sales figures last week but said $36 million had been sold over the summer months alone.

Watch out for rising values. Total property values in town are up this year by an average of 8.65 percent, according to the latest figures from the Palm Beach County Property Appraiser’s office. So even if the season proves less than a gangbuster for agents and brokers, Palm Beach property owners can take some comfort in the fact that their real estate is delivering a return that would delight almost any stockbroker in uncertain times.

Source: Darrell Hofheinz, October 16, 2016, Palm Beach Daily News

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