The Real Deal Miami

Edge auction good, but not that good

By Dan Weil | December 03, 2008 11:00AM

Last month’s auction for condominiums in downtown West Palm Beach raised a big hullabaloo and boosted
market expectations, but local experts say it probably didn’t set a floor for
downtown condo prices.

Wood Partners, developer of the Edge building on Australian Avenue, unloaded 33 of 41
units set for auction. Those were the first condos Wood sold all year.

Prices ranged from $165 to $247 per square foot, with an average of $195 a
square foot. The condos sold for $6.29 million in total, 46 percent below the $13.7
million total of Wood Partners’ last asking prices for the units.

The auction certainly represents some progress, but isn’t necessarily a path
out of a depressed market, local real estate pros say.

“The encouraging thing is that you had willing buyers,” said Stephen
Schmidt, a real estate appraiser for Boyd, Schmidt & Brannum. “It’s
significant that you’re nearing a point where you don’t have both partners at
the dance waiting on opposite sides of the room for the other to come forward.”

But the auction carries little relevance for other downtown buildings,
especially since the Edge is on the fringe of downtown, said Linda Cullen, an
associate broker for Coldwell Banker.

“Usually you just compare units in a building to other units in the
building,” she noted.

Moreover, Wells Fargo already had agreed to provide mortgages for the units
auctioned, making the purchase process much easier than normal.

Given the condo glut in downtown West
Palm Beach, prices still have another 10 percent or so
more to drop, she maintained, even though prices already are down 40 to 50
percent from the peaks of 2005 and 2006.

Three new condo buildings just opened downtown containing 1,175 units: Two City Plaza; CityPlace
South Tower;
and City Palms.

“Every building has its own story,” Schmidt said.