Talk to Palm Beach real estate agents these days, and you’re likely to find them trying to catch their breath as they gear up for a busy season that seems to have spun into action several months ahead of schedule.
Here are a few takeaways from conversations with brokers about the especially busy summer and what house hunters and home sellers on the island might expect during the next seven months.
Weathering The Storm
The outer bands of Hurricane Irma slapped the island Sept. 10 as the massive storm chugged up the state’s west coast. And even though landscaping here took a beating and power was out for several days, the island’s housing stock came through the mostly tropical-storm-force winds with little if any structural damage.
“That’s good news for house hunters,” said principal David Fite of The Fite Group. “The fact that all of our homes weathered the storm so well shows how strong Palm Beach is. It’s a testament to the building codes and the quality of construction.”
Inventory On The Rise?
140 single-family properties are on the market, including houses, townhouses and vacant land, according to a search last week of the Palm Beach Board of Realtors Multiple Listing Service. That’s about the same number available for sale a year ago at this time. Another 230 condominiums and co-ops are listed. Two years ago, that number barely scraped 125.
But several brokers said they expect to see new listings in all categories added by Thanksgiving. And there’s still plenty of room on the market, they agree, for properties that offer premium selling points — newer, newly renovated or on the water.
Developers have been working feverishly to fill the demand for new construction, especially in North End, where smaller properties have been changing hands at a dizzying pace. As of Tuesday, 68 MLS-listed properties have sold on the North End over the past 12 months, 17 more than sold there during the same time period the year before. No wonder that so many North End residents have told town officials that new-construction projects and renovations worry that the character of their neighborhoods is being changed forever.
It’s a trend that’s been in the works for several years. Last season, real estate headlines often focused on never-lived-in houses developed on speculation, mostly on the North End. Those houses changed hands at prices ranging from about $5 million upward to almost $50 million. In fact, three of last season’s eight highest-dollar single-family sales involved never-lived-in waterfront houses, one of which — 101 Indian Road — set a spec record when it sold for $49 million in a deal that saw broker Christian J. Angle of Christian Angle Real Estate at the negotiating table with listing agent Cristina Condon of Sotheby’s International Realty.
But as those houses have sold, builders have been struggling to play catch-up. Several of North End spec houses are still on the drawing boards, thanks to multiple deferrals by the Architectural Commission, which is charged with approving all new architecture in Palm Beach.
Still, buyers can find several houses built on spec, including the most expensive never-lived-in house on the island. That eight-bedroom, French Chateau-inspired mansion of about 36,000 square feet is at 1071 N. OceanBlvd., listed at $64.9 million by Angle. That price nearly $20 million less than when it entered the market in March 2015. The 2-acre double lot faces 242 feet of oceanfront.
The island’s other move-in-ready spec mansion is a furnished lakefront residence at 1340 S. Ocean Blvd., which entered the market a year ago and remains priced at $42.5 million by broker Lawrence Moens of Lawrence A. Moens Associates.
At least three other big-dollar spec houses are rising on Everglades Island. And last month, the Architectural Commission approved an oceanfront Mediterranean-style mansion, to be developed on spec, for a vacant lot at 910 S. Ocean Blvd. in the Estate Section. That property is still for sale in the MLS, and the waiting-in-the-wings developer remains unidentified.
Even so, the price of those properties pales in comparison to the most expensive house listed for sale in the MLS: Netscape co-founder Jim Clark’s historic estate at 1500 S. Ocean Blvd., which Condon is marketing at $115 million.
Building spec houses, or any home, requires land of course. Property owners have been busy of late carving new lots from existing estates, an important strategy on an island built out years ago.
Over the summer, a new Estate Section subdivision came online on property that once was the estate of the late John S. Kluge at the corner of El Bravo Way and South County Road. Angle has four of the subdivision’s lots listed at prices ranging from about $6.9 million to about $14.5 million. A neighbor this month paid nearly $7 million for the fifth lot.
And separate developers have submitted plans to the town for two other lavish spec houses, each on a property created by a so-called “lot split” at a larger estate — one on the beach at 901 N. Ocean Blvd. and the other on the lake at 446 N. Lake Way. Designs for both houses are still in the approval stage.
Meanwhile, a 2-acre oceanfront lot that was once part of the oceanfront estate Donald Trump sold to Russian billionaire Dmitry Rybolovlev nine years ago sold for $37 million this month at 535 N. County Road. It was the second of three lots to sell there in a subdivision created last year. The other lot sold for $34.34 million last fall, and the third is no longer on the market. Moens handled both sides of the two lot sales.
What other land is available in Palm Beach this season?
The MLS this week showed 27 properties in the land category — but only 10 of those are vacant lots. That leaves 17 houses being marketed as tear-downs, at least some of which have elevations that wouldn’t meet new flood-plain regulations.
“As a result, it’s practically impossible for buyers to insure them without raising their elevations,” said Bill Yahn, who oversees the Corcoran Group’s Palm Beach office. “They’re perfectly nice homes but the elevation is poor. Five years ago, these homes would have been sold as livable houses, and the buyers would have gotten them insured.”
The possibility of flooding was brought home to would-be buyers this summer when Hurricane Harvey caused massive flooding in southeast Texas. Palm Beach officials have repeatedly warned about flooding threats caused by hurricanes.
The Price Must Be Right
All of the sales activity of late has certainly boosted closing prices, according to sales reports. The single-family market’s so-called sweet spot — the price at which a wide swath of buyers won’t balk if a property is of good quality — has risen over the past four years from about $6 million to about $8 million, said Yahn.
But even in Palm Beach, where people often have the resources to turn lavish dreams into reality, the final price is likely to be the subject of hard-won negotiations in this revved-up market, brokers agreed.
“People are not going going to grossly overpay for what they want,” said Brown Harris Stevens broker Ava Van de Water. “They’re smart. They’re savvy. They will pay a premium if a house is just what the buyer wants. But they won’t overpay.”
Source: Palm Beach Daily News