PALM BEACH Houses for $1.5 M. or LESS

More Palm Beach houses on sale for $1.5 million and less

By ROBERT JANJIGIAN, Palm Beach Daily News

Monday, June 22, 2009

An island home has never come cheap, but the minimum asking price of modest single-family residences in the 33480 ZIP code has become significantly more reasonable this year.

"With a supply of homes in the mid-ones and under, the island's entry-level bar has been lowered from the $2 million mark, something that hasn't been seen in many, many years," said Engel & Volkers associate Liza Pulitzer, who's been selling Palm Beach real estate for 28 years.

In 2008, the median sale price of a single-family house in Palm Beach was $3,875,000, said attorney Leslie Evans, who tracks the island's real estate market through The Evans Report, which has been published annually since 2000.

"The preliminary figure for the first quarter of 2009 is approximately $3.5 million," he said, and no sales for less than $1.5 million had been recorded since January.

In 2007 and 2008, the fastest-growing price sector for single-family Palm Beach properties was in the $2.5 million and lower range, Evans said.

"The momentum seems to be in that area of the market for the first six months of this year," he said. The trend is in line with 2004, when the median price for a Palm Beach home was $2.2 million, he said.

Last year, Evans reported a dozen transactions of less than $1.5 million.

"There are always smaller, older houses available for under $1.5 million," said Evans. But in most cases, the price per square foot for these properties is staggering, sometimes above $1,000 a square foot, he said.

Pulitzer said she recently searched for North End properties with asking prices of about $1.5 million for a client.

"Two years ago, I would have only been able to find a building lot for $2 million," she said. "Now we're seeing a pretty good number of houses at $2 million or less.

"People are being more reasonable and realistic when it comes to pricing," she said. "You still have to pay a fairly high price for an entry-level house, but you're looking at a half-a-million in savings over what you might have paid just a few years ago."

For less than $1.5 million, "you get a nice starter home, usually a fixer-upper or a handyman special," said Century 21 agent Douglas Rill, who has offices on the island and in West Palm Beach, and has been in real-estate 36 years. "And entree into Palm Beach."

Rill currently has two listings with asking prices below $1.5 million: an $895,000 three-bedroom, two-bath cottage on Root Trail built in 1925, and a $1.27 million three-bedroom, 3.5-bath bungalow on Park Avenue.

The $895,000 property, which has the lowest asking price of single-family homes available on the island, has 960 square feet of living space. "It's a cute little cottage that probably needs about $100,000 worth of renovation work," Rill said. "It needs a kitchen and bath upgrade at least. But the house next door was sold for $1 million about a year-and-a-half ago.

"It's priced to entice," said Rill, who has shown the house to several potential buyers the past few weeks.

Rill describes the Park Avenue house, with more than 2,100 square feet, as "more substantial" and less in need of upgrading.

"I think it's in move-in condition," he said. "But even homes priced at $10 million or more need updating, unless they are brand new."

Rill said he does not see the spate of $1.5 million and less listing prices lasting long.

"Prices will be heading north again, I believe," he said, but added that property owners realize that setting a realistic, competitive asking price is essential. "My guess is that this price category, under $1.5 million, will probably evaporate by next year.

"Maybe a house that's $2.5 million should be at $1.8 (million) or lower" he said. "There shouldn't be air for negotiation in setting a price. The only air should be in the tires."