Home sweet home sales

From left: Barbara Salk and 101 El Bravo Way in Palm Beach
From left: Barbara Salk and 101 El Bravo Way in Palm Beach

Barbara Salk was working for the Related Group when the South Florida real estate market went bust last decade. Home values plunged as a rising number of defaults replaced rapidly rising prices in a market that was heavy on speculators and flippers.

But even with that experience behind her, Salk isn’t worried about the latest boom. Now a developer whose Sakor Development is building a 36-story high-rise called Ion at East Edgewater north of downtown, she can point to big changes.

“I can see that the Miami of today is different from the Miami of 10 years ago,” Salk said. One significant difference, she said, is new buyers are putting down 50 percent deposits. In the past deposits were 20 percent or less.

Another switch is who’s buying. Last time around, “You had a ton of domestic buyers,” Salk said. Today, foreign buyers are fueling the rebound. And data provided by industry research firm RealtyTrac show home prices in South Florida are rising at a faster rate than even the national average.

The median home price in the United States was $180,000 as of May, a 13-percent year-over-year increase.

Broward County’s median was $150,000, up 15 percent from last year and surging 67 percent from the market bottom of $90,000 in March 2011. In Palm Beach County, the median in May reached $167,000, a hike of 19 percent year over year, and a leap of 67 percent from the low point of $99,925 in March 2012.

Then there’s Miami-Dade County, where the median home price in May was $197,800, a year-over-year jump of 24 percent, and up 65 percent from a low of $120,000 in September 2010.

Condominiums in certain parts of Miami-Dade, however, are selling for well above the median price. According to a July study for Miami’s Downtown Development Authority, the average condo sales price in 2013 was $222,927 in Doral, $418,520 in Coral Gables, $425,838 in Aventura and Sunny Isles Beach, $463,976 in Downtown Miami and $541,083 in Miami Beach.

While it’s good to note that average sale prices can be skewed by a handful of pricey sales, Anthony Graziano, senior managing director of Integra Realty Resources and co-author of the authority’s study, said the price gains in the Greater Downtown Miami area are being fueled by foreign buyers.

The area’s close proximity to restaurants and nightlife makes it extremely popular with buyers from overseas, who make up 90 percent of the market for new and pre-sale units in Greater Downtown Miami, according to the study. South Americans, in particular, make up as much as 65 percent of the foreign buyer pool, the report found.

In 2009, resale prices in the downtown area averaged $221 per square foot. Through the second quarter of 2014, resale prices reached $406 per square foot. Preconstruction units are even pricier, selling for between $550 and $675 per square foot.

“We had a conversation with a German investor who had seven [preconstruction] contracts in downtown Miami,” Graziano said. “When those buildings are finished, he can sell those units at a higher price at resale. So the resale market is being driven by preconstruction prices.”

Graziano believes if less than 2,000 units a year are added to the market in Downtown Miami, , the area should continue to be healthy for years to come.

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“Unless someone introduces one large-scale project,” he said, “we have eight or 10 years” before prices contract.

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Priciest properties

While the overall residential market throughout South Florida has shown gains, the tippy top of the market has displayed impressive results as well.

Despite the hype surrounding the new condo market, all of the top five priciest sales in South Florida this year so far were single-family homes — three of those deals were resales and two were for newly built homes.

Not surprisingly, Palm Beach and Miami took all the top spots.

In South Florida’s most expensive deal, the former home of singer Jimmy Buffett and two adjacent properties in Palm Beach sold for $43 million.

The second priciest sale was a home at 101 El Bravo Way in Palm Beach that sold for $30 million to oil company owner Thomas O’Malley.

And a newly built 16,000-square-foot home at 445 Antigua Lane in Palm Beach by developer David Frisbie went for $29 million, finishing in fourth.

All the Palm Beach deals were listed by the Corcoran Group, which has a major presence in the Palm Beach luxury market.

Meanwhile, two properties in Miami made the top five list. A new home by built by developer Todd Glaser and the Posner Group at 30 Star Island Drive sold for $29 million, after being on the market for 260 days. Jill Hertzberg and Jill Eber of Coldwell Banker’s “the Jills” had the listing.

And fifth on the list, 12 Indian Creek Drive on Indian Creek Island sold for $28 million. Steel magnate Leroy Schecter was the seller of the seven-bedroom, 10-bathroom home, and Nelson Gonzalez of EWM had the listing.

Additional reporting by Eric Kalis

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