If Palm Beach real estate were a melody, the season that just ended wasn’t exactly the same song as last season. But it wasn’t an entirely new tune, either.
And the tempo has certainly picked up over the past few months.
“This market is robust. I’ve been going nonstop, as I’m sure other brokers have on the island,” said Cappy Abraham, president of the Palm Beach Board of Realtors and the broker at Palm Beach Residential Properties. “There’s been an explosion.”
Since mid-October, inventory of better-quality single-family homes and condominiums for sale has remained tight. And those properties that have arrived on the market have often been snapped up within weeks — sometimes, even a few days — of being listed, often sparking bidding wars in the process.
Faced with a market in which many homeowners are still reluctant to part with their homes, house-hunters have heeded the advice of their real estate agents: If you see it and like it, make an offer — today, if possible. It might not be there tomorrow.
The big change that occurred late in the season was directly related to a competitive market, driven by limited supply and high demand: Properties that sold did so at higher prices, according to sales figures from the Palm Beach Multiple Listing Service and the Palm Beach County Clerk and Comptroller’s Office.
The median price of all single-family homes that changed hands during the first three months of this year, for example, was $3.1 million, compared to $2.8 million for the same period a year ago. That’s according to MLS data parsed by the Douglas Elliman agency.
In the condominium market for the same period, the median price this year was $547,500 compared to $397,500 last year.
In any event, no deal during the past seven months came close to matching the largest of last season, in which limited liability companies associated with Chicago hedge-funder Kenneth Griffin paid nearly $130 million for four South End properties on Blossom Way. Those private transactions, in December 2012, were brokered by Lawrence A. Moens Associates.
In fact, the total number of sales in the upper price ranges this season has lagged behind last season’s. In large part, that’s because, in late 2012, sellers were scrambling to close deals to avoid pending tax-rate changes that could have gone into effect Jan. 1, 2013, although their impact turned out to be far less dire than feared.
Number of sales drops
Last season, from Oct. 1 to May 1, some 30 deals closed at $6 million or more, according to the prices recorded by the county clerk’s office. This season, during the same period, just 20 sales were recorded in that price category. Those comparisons are for properties that were listed in the Multiple Listing Service, as well as others that changed hands privately.
But the current sales picture is not as bleak as the figures might suggest. An MLS search Friday of single-family listings priced at $6 million or more with sales contracts “pending” showed 10 properties ready to transfer to new owners. Among those were four properties priced above $18 million, including a 2.68-acre oceanfront estate at 540 S. Ocean Blvd. listed at nearly $48 million by the Corcoran Group.
It’s no wonder that so many brokers and their agents are consistently reporting that they are as busy as they were last season, if not busier.
And they can take heart that the inventory crunch — while still significant — is not quite as dire as it was just six months ago. In mid-October, the MLS showed just 120 single-family houses and townhomes in Palm Beach available for sale. As of early last week, that number had climbed to 134.
Of those, 25 properties are priced between $4 million and $7 million, the price category where many house-hunters end up, having found little to their liking in the lower ranges.
Most popular? Newer, renovated homes
A few other items worth noting as the season wraps up:
* After the Great Recession ground new development on the island to a virtual halt, builders and developers began returning this season, especially on the North End. Requests for building permits soared, as developers bought land, made plans and broke ground for new speculative homes — although many of the projects will likely take a year, at least, before they are ready for occupancy.
Meanwhile, buyers who purchased outdated houses during the tail end of the recession are beginning to replace them with new custom homes.
* Two notable high-end “spec” homes sold this season. An oceanfront home at 101 El Bravo Way, which had been on the market for a couple of years, changed hands in March for $30 million; and lakefront 445 Antigua Lane sold for $28.86 million in February, only a few months after it entered the MLS.
* Newer homes, or those recently renovated, remain a powerful draw for many buyers, who have expressed little interest in waiting while they build something new or renovate something older.
* With sales harder to come by, the house-rental market continues to be hot, with heftier prices and rapid turnaround.
* During the worst years of the recession, real estate agents dreamed of the day when better-quality homes would again sell for $1,000 per square foot. That threshold appears to have been reached this season; expect $1,200 per square foot to become the new standard. New homes will likely sell for even more. And although prices for lakefront, oceanfront and newly constructed residences have yet to consistently hit pre-recession levels, the gap continues to narrow.
* The long-troubled South End condo market saw prices rise this season — although there’s still plenty of room for appreciation. However, in Midtown, the price picture wasn’t quite as rosy as it was last season. And like the single-family market, things improved as the season progressed. Outdated units continue to offer an opportunity for investors who want to renovate for resale.
All of which has many real estate agents banking on a summer filled with sales that will ring as music to their ears.
BIGGEST RESIDENTIAL SALES OF THE SEASON
$19.8 million — 4 El Bravo Way
In February, Jan Holdings LLC of Delaware bought El Castillo, James “Jim” Held and Kenn Karakul’s landmarked house at 4 El Bravo Way. The buyer was linked to the investment firm co-founded by Palm Beacher Henry Kravis, according to the deed. Jack Elkins and Bunny Hiatt of Fite Shavell & Associates were the listing agents, and Cristina Condon of Sotheby’s International Realty represented the buyer.