The Real Deal Miami

Palm Beach residential market rebounding

By Christine Davis | January 07, 2010 02:59PM

One of Palm Beach’s leading market watchers believes the tony island’s luxury real estate market is on the rebound this year.

Leslie Roberts Evans, a Palm Beach attorney who tracks and reports sales of single-family homes and condominiums in his quarterly Evans Report Analysis, said interest in Palm Beach properties is rebounding. Based on a spate of high-profile December sales, including the sale of the year — a $24 million deal for the landmarked Addison Mizner home La Bellucia, at 1200 S. Ocean Drive — Evans likes the outlook for 2010.

“There’s still apprehension, but people are looking forward and realizing that Palm Beach has some very good deals,” he said. “Houses in Palm Beach are a type of commodity. There’s only a limited number, and, if there is inflation, home prices in Palm Beach will rise, whereas a CD or some other investments may not have that protection.”

His most recent Evans Report Analysis, released last month and comprised of data through the third quarter, indicated improvement from last year on nearly every level. Data on closed transactions for the first six months of 2009 show 38 residential properties closed in Palm Beach, with a median price of $2.5 million. In the following three months, 23 sales closed with a median price climbing to $3.24 million.

“That’s a strong trend,” Evans said. “Last year, there were a lot of issues — the financial meltdown and then the Bernie Madoff concern. Now, people are stating to realize that the sky isn’t falling down.”

He found two foreclosures out of a total of 61 sales.

“Here, people pay cash, so there was never a subprime loan problem,” Evans said.

Also, there were no sales over $20 million through September in 2009. In 2008, on the other hand, there were six sales over $20 million. Evans’ numbers show that the bulk of the sales in 2009 were $5 million-and-under. On average, sellers had lived in their homes for six years with an annual increase in valuation of 7.3 percent.

There were 114 condo sales in the first six months, and 39 sales for the third quarter, slightly below the average pace, but that could change in the last months of the year, when sales pick up. Data for the end of the year is not yet available. Prices, though, fell 10 percent — the median price was $562,500 in 2008 and by September 2009, it was at $505,000.

“Take a look at other places,” he said. “Prices fell drastically. Not here.”

Other island property market watchers, also saw things getting better.

Ava Van de Water, Brown Harris Stevens executive vice president, said she sees “definite signs of recovery.”

“We are writing more contracts. Even those who don’t need another house are making offers. It’s a good time to buy. We haven’t trumped last year’s record, though,” she said. “We listed Donald Trump’s property [at 505 North County Road] last year, which sold for $95 million.”

Linda Gary, owner of Linda A. Gary Real Estate, sees the market picking up, too. “I can say that with confidence, because we have a number of deals in negotiation in our office,” she said. “If I had more waterfront homes in excellent condition in the $20 million range, I could sell two or three right now.”