The Real Deal Miami

Vero Beach a hub of discount luxury

By Sally Apgar | December 03, 2009 02:42PM

In January, developer Clark French invited 300 investors from Europe, Asia and the Middle East to an open house in Vero Beach. He served Cartier’s private label champagne to sell a lavish estate he built in the Mediterranean Revival style of Addison Mizner’s 1920’s Palm Beach.

It was not your typical Vero Beach real estate sales campaign, but then, neither was the property.

The 16,800-square-foot manse has eight fireplaces, cypress-beamed cathedral ceilings, a cypress-paneled library, a courtyard lap pool and oceanfront pool, a caretaker’s house, guest house and tennis courts. It presides over 15 acres that stretch almost a mile from the Atlantic Ocean to the Indian River.

The spec house at 1920 South A1A called La Palmeraie was originally listed for $30 million, the most ever asked for a home in Vero Beach.

But Vero Beach is not Palm Beach.

Last month, the manse sold for $12.8 million, a whopping discount of 57 percent from the original list price.
“We’ve moved a lot of oceanfront property but the prices are discounted tremendously,” said Mathilde Sorensen of Dale Sorensen Realty in Vero Beach, which has specialized in luxury and waterfront properties in the Vero area since 1978.

With 17 oceanfront properties on the market, Sorensen’s firm has closed on three and put three more under contract in the last 90 days. But all have gone at deep discounts compared to the wild glory days of five or six years ago. Back then, Sorenson said oceanfront properties were going for $40,000 a foot. Today it is closer to $17,000.

“The oceanfront has been the golden key,” said Van Starling, a broker with Premier Estate Properties in Vero. Yet, “prices have come down to 1999 and 2000 [levels] in a lot of cases.”

Starling added, “There have been such incredible opportunities on the beach recently that buyers who had been sitting on the fence for several seasons as the market declined and flattened out have recently just jumped in. Oceanfront is like a blue chip stock.

“It’s a great time to buy. You can’t go wrong with oceanfront,” Sorenson said.

Vero Beach, located on Florida’s Treasure Coast, about 90 miles north of posh Palm Beach, is known for it sleepy quaintness, pockets of quiet wealth and swathes of unspoiled, practically unpopulated beaches.

Unlike the properties in South Florida that are being snapped up by Russian, Middle Eastern, Canadian and other foreign investors, many of Vero’s recent rush of investors seem to be South Floridians fleeing the south’s overcrowding and skyscrapers that darken beaches by mid-afternoon.

Vero’s appeal to the South Beach’s wealthy was sparked in part by singer Gloria Estefan, who built an elegant luxury hotel on the ocean called Costa d’Este. And recently, Palm Beach hotelier Jim Clarke leased the Vero Beach Inn, a former Best Western ravaged by hurricanes, which he plans to transform into a beachy though swanky hotel.

“Our prices went really, really high like selling 500 feet of oceanfront for $26 million,” Sorensen said. “We’re getting a lot of discounted properties now because the prices had escalated so high.”

Sorenson’s firm recently sold another mansion perched high on a dune overlooking the Atlantic that was listed for $12.5 million. The price dropped to $10.4 million and the sale closed at $7.67 million. Sorensen said the sale price is a retreat to price levels of about seven or eight years ago.

A third house in a gated community called Orchid Island was listed for $11.5 and closed at $9 million.

“Now is the time to buy in Vero,” Starling said, “because prices have settled. Now that we actually have some home sales, we now have some comps, so we now have a market.”

Starling added “There are still plenty of buyers looking for great deals. But once you have consecutive sales, and the numbers are showing that that is where the market is, it’s hard to make the argument that things are going to continue to fall or climb. If, we have six to eight months of sales on the ocean and we have a consistent price per square foot, then that’s the market.”