Palm Beach County’s residential real estate sector is heating up, thanks in part to banks’ willingness to issue loans again after a reduction in the number of distressed properties in the area.
The Realtors Association of the Palm Beaches reported that single-family homes were selling faster and at higher prices in this year’s second quarter compared with the same period in 2014.
The median amount of time a house stayed on the market fell 20.8 percent year-over-year, to 42 days. Median home sales prices for single-family homes increased 5.6 percent, to $299,900, compared with last year’s second quarter. Only 6,726 single-family homes were listed for sale, a decrease of 7.4 percent.
Condo prices rose 11.1 percent compared with last year’s second quarter to a median sales price of $150,000, while the number of condos listed for sale fell 8.8 percent, to 5,608 active listings. Palm Beach County condos tended to stay on the market for a median of 48 days, an 11.1 percent year-over-year decrease.
Matt Halperin, president of the Realtors Association of the Palm Beaches, said Palm Beach County is shifting from a buyer’s market, saturated with properties seized by banks or under the threat of foreclosure, toward a more traditional seller’s market,“where buyers intend to live in the house they purchase for at least five or seven years.” Fewer investors are interested in purchasing homes with the intention of renting or “flipping” them for a higher price.
“When the prices were down quite a bit, we saw a lot of investors” buying, Halperin said. “Now that prices are going up again … they’re not buying like they used to.”
Also aiding the buying trend is a greater availability of credit. “The banks are more willing to hand out mortgages again,” he said.
Along with the increase in home prices has come a spike in rents. Reis, Inc., a New York-based research firm, reported that the average rent for an apartment in Palm Beach County was $1,229 a month in the second quarter, a 3.8 percent increase over last year.
This increase in rents has made living in Palm Beach County, which census figures show has a median household income of $52,432, more difficult for many residents. Mike Larson, a real estate analyst with Jupiter-based Weiss Research, said “reasonable affordable housing,” both for renting and buying, can still be found in Palm Beach County, though it’s now a bit harder to locate. “We have definitely seen upward pressure in rents here,” Larson said.
Tim Harris, a real estate broker with Keyes in downtown West Palm Beach, said the county is just starting to recover from the Great Recession, which whacked home prices and killed development throughout South Florida. After foreign investors became willing to put up cash deposits in excess of 40 percent for existing and presale condos, new development resumed in Miami-Dade and Broward counties. That wasn’t the case in Palm Beach. “We haven’t had anything going on,” Harris said.
But now, as demand is increasing even as the supply of new homes decreases, that’s changing. Within the last year, Harris said, as many as 4,500 new condo and apartment units have been proposed for West Palm Beach, the county’s largest city. Billionaire Jeff Greene plans to build 2,300 units on 19 acres of land. And two mixed-use projects adjacent to passenger rail lines are planned: Michael Masanoff’s 1.1 million-square-foot Transit Village by Tri-Rail, with 420 apartment units, and All Aboard Florida’s 60,000-square-foot station, with 275 apartment units by the Florida East Coast railroad tracks.
The new residential development isn’t confined to West Palm Beach. Boca Raton’s downtown area is undergoing a development boom that includes the construction of thousands of new condo and apartment units. Avenir Holdings is pushing for zoning that will allow it to build 4,760 homes on more than 7 square acres of land in Palm Beach Gardens.
Still, the number of new residential projects being advanced is hardly enough to keep pace with the demand, said John Kern of Platinum Realty, who sells residential properties in the Jupiter area. “When you build something new,” the units “sell pretty quickly.”