CONDO WATCH: South Palm Beach County

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Courtesy Condo.com Special to The Pineapple Palm Beach County’s has been putting on an impressive performance so far this June, with Boynton, Delray Beach and Boca Raton clocking in a total $58.7 Million in sales during the first two weeks of the month. That works out to an average individual condo price of over $195,588 in the three major cities. So far this month (and for the better part of the year) Boca Raton has been dominating sales in the county; with agents in the city closing some 111 deals for $25 Million ($5 Million more than Delray saw in the same time period). According to our sources, part of the secret to Boca’s success has been the immensely developer-friendly town Council, eager to make their town into the hot new cultural and entertainment Capital of Palm Beach County. But perhaps the most impressive here is the simple fact that Boynton Beach is keeping up with its two bigger siblings; selling an impressive $12 Million in the same two weeks at an average price of over $150,000. Not bad at all for the relatively quiet burg. We were likewise impressed by the fact that so many of the county’s best condos were selling so fast. On average—throughout all of Delray, Boca and Boynton—condos rarely sat on the market for longer than three months. Serious Promise … or New Paradigm for Palm Beach In a vacuum, these accomplishments all sound impressive. Most markets would love to see $53 Million in sales every other week—and with 4,000 new residences on the way, most markets would love to have the kind of freedom and growth that Palm Beach County’s enjoying right now. In reality, the county faces a few uphill battles; For starters, there’s the fact that sales figures have generally been treading water since Palm Beach’s market recovered from the recession. A glut of old condo inventory and a ton of hasty resales have kept the county from growing quite like they should; with Miami-Dade now planning to add 22,000 new condo units compared to Palm Beach’s 4,000. This is great for buyers; keeping the prices for waterfront condos relatively low (between $400 and $800 per square foot), but it also makes for a more muted economic performance than you’ll see further South. And that’s the other part of the problem, really—the constant comparisons to cities like Miami and Fort Lauderdale. As buyers become increasingly obsessed with urban living, it becomes more difficult to sell the quiet, relaxed lifestyle that Palm Beach has to offer. Golf courses are a hard sell when your buyer wants nightclubs. And if it’s golf courses they want, then Naples’ new luxury communities are willing to offer even more competition for Palm Beach’s finest properties. So it is at least possible that Palm Beach is seeing a shift in fortune … and a gradual slowing of its condo sales due to market forces—at least in the near-term. South Florida’s Saving Grace While it’s possible that Palm Beach’s condo market has endured some degree of stagnation over the last few years, we still think there’s plenty of bright future ahead … We say that because South Florida’s saving grace is its diversity—the fact that so many different communities (and so many different kinds of communities) can co-exist in paradise together. So while the appeal of sun and sand will inevitably lure more tourists southward to Miami-Dade, the appeal of colleges like FAU and quieter communities like Boynton Beach, Florida will keep attracting their own kind of crowd. And some buyers are willing to pay top dollar for their own kind of paradise; as evidenced by the June 1st sale at the Dorchester (for $2.8 Million) or Boca’s record-breaking $17.45 Million sale just last year. One agent alone has closed over $270 Million in Boca Raton condo sales—in a single building alone. These high-end sales—and the increasing flow of new high-end residences—should drive increasingly strong sales for years into the future. For now, and likely for at least the next three to five years, we see Palm Beach as a prime buyer’s market for luxury condo properties. With much lower prices per square foot, much lower unit prices, and plenty of remaining beachfront property, it’s a perfect slice of paradise that’s playing by its own rules and growing at its own pace. This data has been compiled by Condo.com from a variety of data sources. Please send comments or questions to MarketReports@Condo.com