The story behind Florida’s new sales numbers
By KEVIN BRASS, NY Times
Florida, the most popular spot in the U.S. for foreign buyers, saw the number of transactions rise in January, even as the rest of U.S. market continued to sag. Sales of existing homes rose 24 percent compared to the same month of 2008, the fifth month in a row the number of transactions rose, according to the Florida Association of Realtors.
But here’s the kicker: the median sales price for existing homes in the Sunshine State is now $139,500 compared to $206,900 a year ago. That’s a 33 percent drop… in a year.
The lower median price almost certainly reflects the volume of heavily discounted and foreclosures, the Florida association reports. And those distress sales may also explain the increase in transactions.
Meanwhile, the National Association of Realtors reports sales of existing homes in the U.S. dropped to a 12 year low in January, and the median price is down 26 percent from its peak in 2006. The S&P/Case-Shiller Home Price Index found prices were down 18.2 percent in the fourth quarter of 2008 compared to the same period of 2007.
And an index that tracks California luxury homes shows that even top end properties continued to slide, led by the San Diego area where prices fell 8.3 percent in the last year.
***
Saturday, March 28, 2009
Tuesday, March 24, 2009
Palm Beach County home sales up 33% as prices fall 34% from '08
Palm Beach County home sales up 33% as prices fall 34% from '08
By JEFF OSTROWSKI, Palm Beach Post
Monday, March 23, 2009
Palm Beach County home prices continued to fall in February, but sales spiked as bargain hunters snapped up foreclosures and short sales, the Florida Association of Realtors said Monday.
Though bargain properties are selling, Palm Beach County's expensive homes attract few buyers, said Steven Presson, an agent at Corcoran Group Real Estate in Palm Beach. Buyers are chasing lower-priced homes that sell for far less than they fetched in 2005 and 2006.
"There's such a surplus of that distressed property," Presson said. "The good news is at least we're seeing some stuff move. The quicker we can move that inventory, the quicker we can get back to a normal market."
Even so, Presson predicts prices won't rebound for several years.
"In the $500,000-and-above market, there's just no activity," he said.
Presson said he's telling high-end buyers to wait a few months as sellers become more realistic, advice that would be unthinkable for most Realtors.
By JEFF OSTROWSKI, Palm Beach Post
Monday, March 23, 2009
Palm Beach County home prices continued to fall in February, but sales spiked as bargain hunters snapped up foreclosures and short sales, the Florida Association of Realtors said Monday.
Though bargain properties are selling, Palm Beach County's expensive homes attract few buyers, said Steven Presson, an agent at Corcoran Group Real Estate in Palm Beach. Buyers are chasing lower-priced homes that sell for far less than they fetched in 2005 and 2006.
"There's such a surplus of that distressed property," Presson said. "The good news is at least we're seeing some stuff move. The quicker we can move that inventory, the quicker we can get back to a normal market."
Even so, Presson predicts prices won't rebound for several years.
"In the $500,000-and-above market, there's just no activity," he said.
Presson said he's telling high-end buyers to wait a few months as sellers become more realistic, advice that would be unthinkable for most Realtors.
Sunday, March 22, 2009
Palm Beach International Boat Show in Soft Market
Palm Beach International Boat Show hopes improvements buoy buyers in soft market
By MEGAN V. WINSLOW
Daily News, Saturday, March 21, 2009
According to the most recent research by the National Marine Manufacturers Association, a nonprofit in Chicago, new powerboat sales fell between 25 percent and 30 percent in 2008.
"Buying continues to remain soft during the first quarter of '09, but we are selling boats," said Thom Dammrich, NMMA president. "We're just not selling as many as we used to."
.... Tim Johnson, a broker with Palm Beach Yacht Brokerage on Royal Palm Way.
At this year's show, Johnson is representing four clients, each seriously considering the purchase of a large motor yacht.
It's a challenging time for the business, but buyers have the benefit of dealing with a number of motivated sellers, Johnson said.
By MEGAN V. WINSLOW
Daily News, Saturday, March 21, 2009
According to the most recent research by the National Marine Manufacturers Association, a nonprofit in Chicago, new powerboat sales fell between 25 percent and 30 percent in 2008.
"Buying continues to remain soft during the first quarter of '09, but we are selling boats," said Thom Dammrich, NMMA president. "We're just not selling as many as we used to."
.... Tim Johnson, a broker with Palm Beach Yacht Brokerage on Royal Palm Way.
At this year's show, Johnson is representing four clients, each seriously considering the purchase of a large motor yacht.
It's a challenging time for the business, but buyers have the benefit of dealing with a number of motivated sellers, Johnson said.
SLOW SEASON: Tourists Not Spending
SLOW SEASON: Tourists continue to visit, but they're spending less, retailers say
By ALLISON ROSS
Palm Beach Post
Sunday, March 22, 2009
It's a perfect Saturday afternoon: Chamber of Commerce weather.
On Clematis Street in West Palm Beach, couples with Starbucks frappuccinos in hand peer into the windows of Maine Cottage. Customers sip drinks at Rocco's Tacos.
In CityPlace, women with dark, oversize sunglasses push strollers past storefronts.
It's the same scene every tourist season.
Midway through this season, though, tourists are a little more reluctant to pull out their pocketbooks. There may be crowds, but there are fewer shopping bags. Cash typically spent on attractions, souvenirs, restaurants and gifts is in short supply.
"Are you kidding? There's no tourist season this year," said Renee Davidson, a waitress at Italian restaurant De Napoli on Clematis Street. "Last year it was slower, but this year it's like it's not happening."
Palm Beach County's tourist season, which runs from Thanksgiving to Easter, is a driving force in the area's economy.
Snowbirds from the Northeast and Canada flock to beaches. International travelers come for a taste of the South Florida lifestyle.
Those revenues are generally the nest eggs that businesses use to get them through the leaner summer months.
"The tourist season keeps a lot of little shops and stores and restaurants open," said Enid Atwater, a spokeswoman for the Palm Beach County Convention and Visitors Bureau.
"The county depends on travelers to keep the economic engine going, to keep our economy alive."
But this year, although visitors continue to crowd popular destinations such as CityPlace, the tourist season has been quieter than usual because of worries about the tough economy.
According to figures from Palm Beach International Airport, the number of passengers coming through the airport from November through January fell 10.2 percent, which translates to 187,180 fewer travelers.
In the same period, the number of international travelers fell 40.6 percent from the year before.
'Big challenge ahead'
While the county's hotels are doing better at filling up rooms than the rest of Florida, revenue for the county's so-called bed tax - a tax on short-term lodging - has fallen almost 15 percent since September, forcing Palm Beach County tourism agencies to slash their budgets.
"Things are going significantly slower than usual," said Jorge Pesquera, president and chief executive of the Convention and Visitors Bureau. "We have a big challenge ahead."
In January, the average hotel occupancy rate was 64 percent, down 8.2 percent from January 2008, according to Smith Travel Research Inc.
There might be even fewer travelers if hotels in the area weren't cutting their rates to entice customers. The average daily room rate fell a record 18.1 percent in January to $160.84, according to Smith Travel.
Even upscale hotels aren't immune.
"The whole industry now, it's a day-to-day situation as to how we're doing," said Christine DiRocco, director of public relations for The Ritz-Carlton in Manalapan. "People are a little bit more aware of how and when they spend their money."
DiRocco declined to talk about whether the hotel was cutting room rates to bring customers in, but did say that The Ritz-Carlton was being "competitive in trying to attract New England guests down here. You have to be open and flexible in these times."
Rick Rose, co-owner of Grandview Gardens Bed & Breakfast in West Palm Beach, said his business is down 5 percent to 10 percent.
Both DiRocco and Rose noted that a lot of people are waiting longer to book, in part because they are hoping to take advantage of last-minute offers.
"Most times, that works, because we're very nervous about filling rooms," Rose said.
Fewer gifts, smaller tabs
Even when rooms are filled, tourists are watching their wallets and budgets. As a result, businesses that rely on winter tourism are ringing up smaller sales.
For instance, CityPlace said traffic through its garages was up 12 percent in January and February, but Field of Greens general manager Susan McCann said sales have been weaker than usual.
"Business is definitely slower than normal," McCann said. "We're still seeing tourists - on weekends especially - but fewer tourists are coming in."
According to data from the Tourist Development Council of Palm Beach County, the average daily expenditure per tourist from October to December fell about 12 percent from the same period in 2007.
With the exception of entertainment, spending fell across the board. For instance, average tourists spent $27 a day in the fourth quarter of 2007 on gifts and shopping; for that period in 2008, they spent $22 on presents for themselves and the family back home.
A $60 tab for food and drinks in 2007 averaged $50 a day from October through December last year.
Atlantic Avenue in Delray Beach remains crowded, but Marjorie Ferrer, executive director of the Delray Beach Downtown Development Authority, said some of the stores on Atlantic Avenue are cutting their part-time workforce.
Ferrer said the authority is brainstorming ideas to lure visitors and is even talking about offering leniency for people who are a little late getting back to their cars when their parking meters expire.
By ALLISON ROSS
Palm Beach Post
Sunday, March 22, 2009
It's a perfect Saturday afternoon: Chamber of Commerce weather.
On Clematis Street in West Palm Beach, couples with Starbucks frappuccinos in hand peer into the windows of Maine Cottage. Customers sip drinks at Rocco's Tacos.
In CityPlace, women with dark, oversize sunglasses push strollers past storefronts.
It's the same scene every tourist season.
Midway through this season, though, tourists are a little more reluctant to pull out their pocketbooks. There may be crowds, but there are fewer shopping bags. Cash typically spent on attractions, souvenirs, restaurants and gifts is in short supply.
"Are you kidding? There's no tourist season this year," said Renee Davidson, a waitress at Italian restaurant De Napoli on Clematis Street. "Last year it was slower, but this year it's like it's not happening."
Palm Beach County's tourist season, which runs from Thanksgiving to Easter, is a driving force in the area's economy.
Snowbirds from the Northeast and Canada flock to beaches. International travelers come for a taste of the South Florida lifestyle.
Those revenues are generally the nest eggs that businesses use to get them through the leaner summer months.
"The tourist season keeps a lot of little shops and stores and restaurants open," said Enid Atwater, a spokeswoman for the Palm Beach County Convention and Visitors Bureau.
"The county depends on travelers to keep the economic engine going, to keep our economy alive."
But this year, although visitors continue to crowd popular destinations such as CityPlace, the tourist season has been quieter than usual because of worries about the tough economy.
According to figures from Palm Beach International Airport, the number of passengers coming through the airport from November through January fell 10.2 percent, which translates to 187,180 fewer travelers.
In the same period, the number of international travelers fell 40.6 percent from the year before.
'Big challenge ahead'
While the county's hotels are doing better at filling up rooms than the rest of Florida, revenue for the county's so-called bed tax - a tax on short-term lodging - has fallen almost 15 percent since September, forcing Palm Beach County tourism agencies to slash their budgets.
"Things are going significantly slower than usual," said Jorge Pesquera, president and chief executive of the Convention and Visitors Bureau. "We have a big challenge ahead."
In January, the average hotel occupancy rate was 64 percent, down 8.2 percent from January 2008, according to Smith Travel Research Inc.
There might be even fewer travelers if hotels in the area weren't cutting their rates to entice customers. The average daily room rate fell a record 18.1 percent in January to $160.84, according to Smith Travel.
Even upscale hotels aren't immune.
"The whole industry now, it's a day-to-day situation as to how we're doing," said Christine DiRocco, director of public relations for The Ritz-Carlton in Manalapan. "People are a little bit more aware of how and when they spend their money."
DiRocco declined to talk about whether the hotel was cutting room rates to bring customers in, but did say that The Ritz-Carlton was being "competitive in trying to attract New England guests down here. You have to be open and flexible in these times."
Rick Rose, co-owner of Grandview Gardens Bed & Breakfast in West Palm Beach, said his business is down 5 percent to 10 percent.
Both DiRocco and Rose noted that a lot of people are waiting longer to book, in part because they are hoping to take advantage of last-minute offers.
"Most times, that works, because we're very nervous about filling rooms," Rose said.
Fewer gifts, smaller tabs
Even when rooms are filled, tourists are watching their wallets and budgets. As a result, businesses that rely on winter tourism are ringing up smaller sales.
For instance, CityPlace said traffic through its garages was up 12 percent in January and February, but Field of Greens general manager Susan McCann said sales have been weaker than usual.
"Business is definitely slower than normal," McCann said. "We're still seeing tourists - on weekends especially - but fewer tourists are coming in."
According to data from the Tourist Development Council of Palm Beach County, the average daily expenditure per tourist from October to December fell about 12 percent from the same period in 2007.
With the exception of entertainment, spending fell across the board. For instance, average tourists spent $27 a day in the fourth quarter of 2007 on gifts and shopping; for that period in 2008, they spent $22 on presents for themselves and the family back home.
A $60 tab for food and drinks in 2007 averaged $50 a day from October through December last year.
Atlantic Avenue in Delray Beach remains crowded, but Marjorie Ferrer, executive director of the Delray Beach Downtown Development Authority, said some of the stores on Atlantic Avenue are cutting their part-time workforce.
Ferrer said the authority is brainstorming ideas to lure visitors and is even talking about offering leniency for people who are a little late getting back to their cars when their parking meters expire.
Palm Beach County's Declining Home Prices Stir the Market
Palm Beach County's declining home prices stir market
First-time buyers take advantage of bargains
By Paul Owers | South Florida Sun Sentinel
February 26, 2009
Bargain hunters have taken over South Florida's housing market.
The housing slump, entering its fourth year, is unlikely to turn around soon, real estate and economic analysts say.
Moody's Economy.com, a West Chester, Pa., research firm, expects the local housing market to remain depressed for all of 2009 and most of 2010. It forecasts home prices in Palm Beach County to hit bottom in the third quarter of next year.
... Mounting job losses are starting to hurt the housing market. "That takes away from the number of people who want to buy or can buy a house," said Chris Lafakis, an economist for Moody's.
In 2008, Palm Beach County had the nation's 64th-highest foreclosure rate, with one in every 27 homes in some stage of distress, according to RealtyTrac Inc., a foreclosure listing firm.
The Obama plan will allow Fannie Mae and Freddie Mac to refinance mortgages as long as the loan-to-value ratios are no greater than 105 percent. Under current rules, they can't guarantee home refinancing if a mortgage amounts to more than 80 percent of the home's value.
But analysts say many South Floridians still won't be able to refinance because the severe price declines here mean homeowners owe more than 105 percent of their property's value.
First-time buyers take advantage of bargains
By Paul Owers | South Florida Sun Sentinel
February 26, 2009
Bargain hunters have taken over South Florida's housing market.
The housing slump, entering its fourth year, is unlikely to turn around soon, real estate and economic analysts say.
Moody's Economy.com, a West Chester, Pa., research firm, expects the local housing market to remain depressed for all of 2009 and most of 2010. It forecasts home prices in Palm Beach County to hit bottom in the third quarter of next year.
... Mounting job losses are starting to hurt the housing market. "That takes away from the number of people who want to buy or can buy a house," said Chris Lafakis, an economist for Moody's.
In 2008, Palm Beach County had the nation's 64th-highest foreclosure rate, with one in every 27 homes in some stage of distress, according to RealtyTrac Inc., a foreclosure listing firm.
The Obama plan will allow Fannie Mae and Freddie Mac to refinance mortgages as long as the loan-to-value ratios are no greater than 105 percent. Under current rules, they can't guarantee home refinancing if a mortgage amounts to more than 80 percent of the home's value.
But analysts say many South Floridians still won't be able to refinance because the severe price declines here mean homeowners owe more than 105 percent of their property's value.
Money is Tight - West Palm Beach Home & Garden Show in Hard Economic Times
West Palm Beach Home & Garden Show adapted for budget-conscious
Affordable products on display for those staying home more during difficult times
By Paul Owers | South Florida Sun-Sentinel
March 21, 2009
.... "We're trying to be sensitive to these economic issues," said Ryan Roth, show manager.
With South Florida's housing market in the doldrums for more than three years, many homeowners are resigned to renovating their properties and staying put. Show vendors are eager to capitalize on that sentiment.
It takes six to eight hours to complete a bathroom refinishing, which costs $400 to $1,000. The work comes with a 10-year warranty.
.........their strategy was to resist the sales pitches, at least until they could see all the vendors and compare the best deals.
"Hey, money's tight," she said.
Affordable products on display for those staying home more during difficult times
By Paul Owers | South Florida Sun-Sentinel
March 21, 2009
.... "We're trying to be sensitive to these economic issues," said Ryan Roth, show manager.
With South Florida's housing market in the doldrums for more than three years, many homeowners are resigned to renovating their properties and staying put. Show vendors are eager to capitalize on that sentiment.
It takes six to eight hours to complete a bathroom refinishing, which costs $400 to $1,000. The work comes with a 10-year warranty.
.........their strategy was to resist the sales pitches, at least until they could see all the vendors and compare the best deals.
"Hey, money's tight," she said.
Friday, March 20, 2009
PALM BEACH - Luxury Retail Suffering with the Bad Economy
Worth Avenue retailers make staff reductions in response to the economy
from the Daily News
By Robert JANJIGIAN
Sunday, March 15, 2009
The two largest stores on the Avenue, Neiman Marcus and Saks Fifth Avenue, have reduced the number of employees on their payrolls, although neither would reveal the current number of employees at their island locations. Saks would not disclose the number of associates terminated at its Worth Avenue branch.
Both Neiman's and Saks announced in recent months their intentions to reduce the payroll at stores across the country in response to recently reported losses...
Sales and non-selling support positions were eliminated at the Neiman Marcus Worth Avenue branch as part of a company-wide reduction.
Several jobs were cut at the island Saks, but details were unavailable.
"In January, Saks Fifth Avenue announced a company-wide reduction in our workforce of approximately 1,100 positions, or 9 percent of our associate base," said Lori Berg, general manager of Saks' Palm Beach branch. "Saks is not providing details as to how the individual stores were affected."
Earlier this year, Tiffany & Co. offered employees who meet age criteria a retirement package to reduce overhead and costs across the chain.
Employees were also let go over the past month at Gucci's Worth Avenue store.
Van Cleef & Arpels, which recently announced its intention to relocate its 249 Worth Ave. store.
"We are paying careful attention to the current economic climate....."
from the Daily News
By Robert JANJIGIAN
Sunday, March 15, 2009
The two largest stores on the Avenue, Neiman Marcus and Saks Fifth Avenue, have reduced the number of employees on their payrolls, although neither would reveal the current number of employees at their island locations. Saks would not disclose the number of associates terminated at its Worth Avenue branch.
Both Neiman's and Saks announced in recent months their intentions to reduce the payroll at stores across the country in response to recently reported losses...
Sales and non-selling support positions were eliminated at the Neiman Marcus Worth Avenue branch as part of a company-wide reduction.
Several jobs were cut at the island Saks, but details were unavailable.
"In January, Saks Fifth Avenue announced a company-wide reduction in our workforce of approximately 1,100 positions, or 9 percent of our associate base," said Lori Berg, general manager of Saks' Palm Beach branch. "Saks is not providing details as to how the individual stores were affected."
Earlier this year, Tiffany & Co. offered employees who meet age criteria a retirement package to reduce overhead and costs across the chain.
Employees were also let go over the past month at Gucci's Worth Avenue store.
Van Cleef & Arpels, which recently announced its intention to relocate its 249 Worth Ave. store.
"We are paying careful attention to the current economic climate....."
Thursday, March 19, 2009
Luxury Palm Beach Real Estate BUST
Time for 'reality check': Palm Beach feels the downturn after some huge sales in '08
By JEFF OSTROWSKI
Palm Beach Post
Sunday, March 15, 2009
PALM BEACH — After defying gravity for years, the venerable mansion market on the island has seen a "reality check," according to the president of the Palm Beach Board of Realtors.
The median price of single-family homes sold in Palm Beach from October through December fell to $2.7 million, down 20 percent from $3.4 million in the fourth quarter of 2007, according to a Palm Beach Postanalysis of The Evans Report, prepared by attorney Les Evans.
And only 16 sales closed during the period, down from 25 deals in the fourth quarter of 2007.
Realtors acknowledge that the record-breaking real estate party of early 2008 is over. One who asked not to be named described the fourth quarter as "horrible" - and the first quarter of this year is shaping up to be even slower.
Only four single-family homes sold in Palm Beach from Jan. 1 through early March, according to the Palm Beach County property appraiser. A dozen sold during the same period last year.
"People are holding on to their money now," said Clare O'Keeffe, a real estate broker and president of the Palm Beach Board of Realtors. "Nobody knows what's happening in the stock market or the economy."
While O'Keeffe says the mansion market has taken just a temporary breather, others are less optimistic.
Doug Kass, a hedge fund manager who owns a home in Palm Beach, says the island's housing market has ground to a halt. He blames the combination of the global financial collapse and the Bernie Madoff scam, which hit hard on the island.
"I think the numbers are appreciably worse than (Evans') report shows," Kass said.
"Things couldn't get worse. You have the economy eroding. You have the stock market in disarray. And you have a major fraud that has cut a wide swath through our community."
Sudden turn in late '08
What a difference a few months make. The Palm Beach mansion market was so hot during the first seven months of 2008 that the full-year results look buoyant despite the end-of-year slump. Palm Beach saw a number of blockbuster sales, including an $81.5 million deal for Jones Apparel Group founder Sidney Kimmel's manse in April and $95 million for an estate owned by billionaire Donald Trump in July.
However, The Post's analysis of Evans' numbers shows that during the fourth quarter, even Palm Beach wasn't immune from the global financial crisis and cratering stock market. Still, Evans dismissed the fourth-quarter figures as irrelevant.
"I don't like to look at quarterly numbers," Evans said. "One quarter tends to skew it a little."
The downward trend held for the third quarter, too. Despite Trump's record-setting sale in July, the median home price in Palm Beach fell to $3.05 million in the second half of 2008, down from $3.39 million in the second half of 2007.
And seven of the 42 houses that sold in the second half of 2008 went for less than the seller had paid in the previous transaction.
The Palm Beach condo market also slowed in 2008, according to Evans. The number of sales fell to 196 in 2008 from 245 in 2007, a 20 percent drop. And the median price fell to $600,000 from $825,000, a 27 percent decline.
The decline in Palm Beach prices mirrored the fall in the broader market. For all of Palm Beach County, the median price of a single-family home plunged 27 percent from the fourth quarter of 2007 to the fourth quarter of 2008, according to the Florida Association of Realtors.
Publicly, Realtors pointed to a variety of reasons the Palm Beach market slowed. The fourth quarter is a dead time anyway, they said, and some buyers didn't want to commit so close to the presidential election.
Privately, though, several acknowledge that the downturn was deeper than they expected.
Many say luxury real estate no longer is the haven it once was.
"People used to think the rich could make it through these difficult times because they had plenty of money," said Scott Custer, chief executive of Raleigh, N.C.-based RBC Bank, which has seven offices in Palm Beach County. "But nobody's going unscathed through this downturn."
Evans' report isn't the first sign of cooling in the once-hot mansion market. The home at 756 Slope Trail in Palm Beach sold last month for $5.96 million after being marketed for as much as $10.3 million, although Evans points out that the sale price of $1,000 a square foot isn't too shabby.
In January, a 23,000-square-foot manse in Boca Raton sold for $12.9 million, after seller Dru Schmitt originally listed it for $24.9 million.
And mansion developer Frank McKinney said in late February that he has put on hold plans for two oceanfront estates in Manalapan until he sells a just-finished manse that's on the market for $29 million.
"It's a pretty scary time - I know I'm scared," McKinney said.
During Palm Beach's long boom, entry-level homes priced at less than $2 million were scarce, said Realtor John Pinson. No more.
Suddenly single-family homes are available for less than $1 million in Palm Beach.
"That's something, to have properties priced under $1 million," Pinson said. "It's been a long time since that was the case."
By JEFF OSTROWSKI
Palm Beach Post
Sunday, March 15, 2009
PALM BEACH — After defying gravity for years, the venerable mansion market on the island has seen a "reality check," according to the president of the Palm Beach Board of Realtors.
The median price of single-family homes sold in Palm Beach from October through December fell to $2.7 million, down 20 percent from $3.4 million in the fourth quarter of 2007, according to a Palm Beach Postanalysis of The Evans Report, prepared by attorney Les Evans.
And only 16 sales closed during the period, down from 25 deals in the fourth quarter of 2007.
Realtors acknowledge that the record-breaking real estate party of early 2008 is over. One who asked not to be named described the fourth quarter as "horrible" - and the first quarter of this year is shaping up to be even slower.
Only four single-family homes sold in Palm Beach from Jan. 1 through early March, according to the Palm Beach County property appraiser. A dozen sold during the same period last year.
"People are holding on to their money now," said Clare O'Keeffe, a real estate broker and president of the Palm Beach Board of Realtors. "Nobody knows what's happening in the stock market or the economy."
While O'Keeffe says the mansion market has taken just a temporary breather, others are less optimistic.
Doug Kass, a hedge fund manager who owns a home in Palm Beach, says the island's housing market has ground to a halt. He blames the combination of the global financial collapse and the Bernie Madoff scam, which hit hard on the island.
"I think the numbers are appreciably worse than (Evans') report shows," Kass said.
"Things couldn't get worse. You have the economy eroding. You have the stock market in disarray. And you have a major fraud that has cut a wide swath through our community."
Sudden turn in late '08
What a difference a few months make. The Palm Beach mansion market was so hot during the first seven months of 2008 that the full-year results look buoyant despite the end-of-year slump. Palm Beach saw a number of blockbuster sales, including an $81.5 million deal for Jones Apparel Group founder Sidney Kimmel's manse in April and $95 million for an estate owned by billionaire Donald Trump in July.
However, The Post's analysis of Evans' numbers shows that during the fourth quarter, even Palm Beach wasn't immune from the global financial crisis and cratering stock market. Still, Evans dismissed the fourth-quarter figures as irrelevant.
"I don't like to look at quarterly numbers," Evans said. "One quarter tends to skew it a little."
The downward trend held for the third quarter, too. Despite Trump's record-setting sale in July, the median home price in Palm Beach fell to $3.05 million in the second half of 2008, down from $3.39 million in the second half of 2007.
And seven of the 42 houses that sold in the second half of 2008 went for less than the seller had paid in the previous transaction.
The Palm Beach condo market also slowed in 2008, according to Evans. The number of sales fell to 196 in 2008 from 245 in 2007, a 20 percent drop. And the median price fell to $600,000 from $825,000, a 27 percent decline.
The decline in Palm Beach prices mirrored the fall in the broader market. For all of Palm Beach County, the median price of a single-family home plunged 27 percent from the fourth quarter of 2007 to the fourth quarter of 2008, according to the Florida Association of Realtors.
Publicly, Realtors pointed to a variety of reasons the Palm Beach market slowed. The fourth quarter is a dead time anyway, they said, and some buyers didn't want to commit so close to the presidential election.
Privately, though, several acknowledge that the downturn was deeper than they expected.
Many say luxury real estate no longer is the haven it once was.
"People used to think the rich could make it through these difficult times because they had plenty of money," said Scott Custer, chief executive of Raleigh, N.C.-based RBC Bank, which has seven offices in Palm Beach County. "But nobody's going unscathed through this downturn."
Evans' report isn't the first sign of cooling in the once-hot mansion market. The home at 756 Slope Trail in Palm Beach sold last month for $5.96 million after being marketed for as much as $10.3 million, although Evans points out that the sale price of $1,000 a square foot isn't too shabby.
In January, a 23,000-square-foot manse in Boca Raton sold for $12.9 million, after seller Dru Schmitt originally listed it for $24.9 million.
And mansion developer Frank McKinney said in late February that he has put on hold plans for two oceanfront estates in Manalapan until he sells a just-finished manse that's on the market for $29 million.
"It's a pretty scary time - I know I'm scared," McKinney said.
During Palm Beach's long boom, entry-level homes priced at less than $2 million were scarce, said Realtor John Pinson. No more.
Suddenly single-family homes are available for less than $1 million in Palm Beach.
"That's something, to have properties priced under $1 million," Pinson said. "It's been a long time since that was the case."
South Florida remains the toughest market in the nation
Houses stay for sale the longest in South Florida market
By Paul Owers | South Florida Sun-Sentinel
March 14, 2009
South Florida remains the toughest market in the nation for selling a house, even as big price declines here are attracting buyers.
The typical house in Palm Beach, Broward and Miami-Dade counties lingers for 193 days, according to a February report released this week by California real estate firms Real IQ and Altos Research.
That's up from 156 days last summer and well ahead of second-place Chicago, where the average house stays on the market for 180 days.
South Florida has had the nation's slowest sales rate every month since the survey began in 2007.
By Paul Owers | South Florida Sun-Sentinel
March 14, 2009
South Florida remains the toughest market in the nation for selling a house, even as big price declines here are attracting buyers.
The typical house in Palm Beach, Broward and Miami-Dade counties lingers for 193 days, according to a February report released this week by California real estate firms Real IQ and Altos Research.
That's up from 156 days last summer and well ahead of second-place Chicago, where the average house stays on the market for 180 days.
South Florida has had the nation's slowest sales rate every month since the survey began in 2007.
Thursday, March 12, 2009
Florida Real Estate Market: Busting or Adjusting?
Florida Real Estate Market: Busting or Adjusting?
from Yaerd.org
Real estate “experts” will have their subscribers believe that Florida home prices are plummeting, that investing in Florida real estate will amount to nothing but catastrophe. Many are even referring to this lapse in skyrocketing appreciation rates as a “crash.” But all the factors that contribute to a booming real estate market are still present, leaving no chance for a “Grapes of Wrath” future in store for Florida. Real estate investors have simply stopped looking to Florida because the market’s exorbitant prices are making middle-class investment less attainable.
Recent studies have yielded a more positive view of the appreciation rate decline, uncovering evidence that real estate in Florida will be AFFORDABLE once again. All the elements of a healthy real estate market are already set in place—an increasing job market, an influx of both domestic and international immigration coupled with high fertility rates, declining mortgage interest rates, and a lack of undeveloped land—that make a robust real estate market inevitable.
Now that prices are dropping, Floridians can get a higher quality property for a REASONABLE price and the lower rates will cause more people to take advantage of the abundance of jobs in areas that they would not have been able to afford mere months ago. The state has high potential for lucrative long-term investment as Florida’s growth will incite a gradual home value appreciation without driving out residents with more modest incomes. And many industry professionals see the softening as a positive, a way to cleanse the market of incompetent bandwagon developers and the SPECULATORS and FLIPPERS who were driving market prices to unaffordable highs.
from Yaerd.org
Real estate “experts” will have their subscribers believe that Florida home prices are plummeting, that investing in Florida real estate will amount to nothing but catastrophe. Many are even referring to this lapse in skyrocketing appreciation rates as a “crash.” But all the factors that contribute to a booming real estate market are still present, leaving no chance for a “Grapes of Wrath” future in store for Florida. Real estate investors have simply stopped looking to Florida because the market’s exorbitant prices are making middle-class investment less attainable.
Recent studies have yielded a more positive view of the appreciation rate decline, uncovering evidence that real estate in Florida will be AFFORDABLE once again. All the elements of a healthy real estate market are already set in place—an increasing job market, an influx of both domestic and international immigration coupled with high fertility rates, declining mortgage interest rates, and a lack of undeveloped land—that make a robust real estate market inevitable.
Now that prices are dropping, Floridians can get a higher quality property for a REASONABLE price and the lower rates will cause more people to take advantage of the abundance of jobs in areas that they would not have been able to afford mere months ago. The state has high potential for lucrative long-term investment as Florida’s growth will incite a gradual home value appreciation without driving out residents with more modest incomes. And many industry professionals see the softening as a positive, a way to cleanse the market of incompetent bandwagon developers and the SPECULATORS and FLIPPERS who were driving market prices to unaffordable highs.
Moody's: Palm Beach County to Hit Bottom in 3rd Q of 2010
The housing slump, entering its fourth year, is unlikely to turn around soon, real estate and economic analysts say.
Moody's Economy.com, a West Chester, Pa., research firm, expects the local housing market to remain depressed for all of 2009 and most of 2010. It forecasts home prices in Palm Beach County to hit bottom in the third quarter of next year.
Home shoppers now are drawn mostly to distressed properties owned by lenders or desperate sellers, real estate agents say.
.......
Moody's Economy.com, a West Chester, Pa., research firm, expects the local housing market to remain depressed for all of 2009 and most of 2010. It forecasts home prices in Palm Beach County to hit bottom in the third quarter of next year.
Home shoppers now are drawn mostly to distressed properties owned by lenders or desperate sellers, real estate agents say.
.......
Palm Beach County foreclosures see 50% jump
Palm Beach County foreclosures see 50% jump
By JEFF OSTROWSKI
Palm Beach Post Staff Writer
Wednesday, March 11, 2009
Palm Beach County's foreclosure rate jumped by more than 50 percent in February, according to numbers released Thursday by RealtyTrac, a foreclosure data firm in Irvine, Calif.
About 2,665 Palm Beach County properties were in some stage of foreclosure, up 53 percent from January and up 57 percent from February 2008.
The flood of foreclosures has sent the region's home prices plummeting - and has drawn bargain hunters who are betting that the market is near bottom.
Statewide, foreclosure activity spiked 14 percent from January. Lenders in December agreed to a 45-day voluntary moratorium on filings, but that respite ended at the end of January.
Florida, Nevada, Arizona and California had the nation's top foreclosure rates.
Among metro areas, Las Vegas was first, followed by the Cape Coral-Fort Myers area.
Nationwide, nearly 291,000 homes received at least one foreclosure-related notice last month, up 6 percent from January and 30 percent from February 2008.
"It doesn't bode well," for the beleaguered U.S. housing market, said Rick Sharga, vice president for marketing at RealtyTrac. "At least for the foreseeable future, it's going to continue to be pretty ugly."
The number of foreclosures continues to soar nationwide.....
By JEFF OSTROWSKI
Palm Beach Post Staff Writer
Wednesday, March 11, 2009
Palm Beach County's foreclosure rate jumped by more than 50 percent in February, according to numbers released Thursday by RealtyTrac, a foreclosure data firm in Irvine, Calif.
About 2,665 Palm Beach County properties were in some stage of foreclosure, up 53 percent from January and up 57 percent from February 2008.
The flood of foreclosures has sent the region's home prices plummeting - and has drawn bargain hunters who are betting that the market is near bottom.
Statewide, foreclosure activity spiked 14 percent from January. Lenders in December agreed to a 45-day voluntary moratorium on filings, but that respite ended at the end of January.
Florida, Nevada, Arizona and California had the nation's top foreclosure rates.
Among metro areas, Las Vegas was first, followed by the Cape Coral-Fort Myers area.
Nationwide, nearly 291,000 homes received at least one foreclosure-related notice last month, up 6 percent from January and 30 percent from February 2008.
"It doesn't bode well," for the beleaguered U.S. housing market, said Rick Sharga, vice president for marketing at RealtyTrac. "At least for the foreseeable future, it's going to continue to be pretty ugly."
The number of foreclosures continues to soar nationwide.....
Monday, March 9, 2009
A Gloomy Outlook for Home Sales’ Big Season
A Gloomy Outlook for Home Sales’ Big Season
...
Troubled housing markets do not rebound quickly. The first thing to turn up are sales of homes as banks and individuals acknowledge that prices are no longer what they were; some of that is already happening in California and Florida.
Home prices tend to lag sales by a couple of years. That is what happened in Massachusetts and California in the early 1990s.
How long will the current slump last?
A futures market for home prices provides one sobering forecast. Trading in contracts that track home prices in 25 metropolitan areas suggests that home prices will fall about 15 percent this year and hit bottom in 2010, according to Radar Logic, a firm that created the index on which the trading is based. The market is also predicting that the Los Angeles area is closer to the bottom than New York.
New York Times, March 7, 2009.
...
Troubled housing markets do not rebound quickly. The first thing to turn up are sales of homes as banks and individuals acknowledge that prices are no longer what they were; some of that is already happening in California and Florida.
Home prices tend to lag sales by a couple of years. That is what happened in Massachusetts and California in the early 1990s.
How long will the current slump last?
A futures market for home prices provides one sobering forecast. Trading in contracts that track home prices in 25 metropolitan areas suggests that home prices will fall about 15 percent this year and hit bottom in 2010, according to Radar Logic, a firm that created the index on which the trading is based. The market is also predicting that the Los Angeles area is closer to the bottom than New York.
New York Times, March 7, 2009.
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