Downtown West Palm Beach Still Has 700 Unsold News Condo Units on the Market
Even though condo buyers acquired more developer units per month in the first 90 days of 2011 than a year earlier, the Downtown West Palm Beach market still has more than 700 new condos unsold from the South Florida real estate boom, says Bal Harbour Florida-based Condo Vultures.
As of March 31, 2011, the unsold new condo inventory represents nearly 21 percent of the more than 3,400 units created in Downtown West Palm Beach since 2003, according to Condo Vultures.
In the first quarter of 2011, buyers acquired an average of 12 new condos per month at a blended price of $236 per square foot in Downtown West Palm Beach, according to an analysis of Palm Beach County records.
This year's new condo sales activity represents a nine percent increase in transactions from the first quarter of 2010 when an average of 11 units were acquired per month at a blended price of $232 per square foot.
"At the current sales pace in this all-cash market, Downtown West Palm Beach has nearly five years of available inventory remaining," said Peter Zalewski, a principal with Condo Vultures. "The good news is Downtown West Palm Beach has fewer unsold new condos than the markets of Greater Downtown Miami, South Beach, and Sunny Isles Beach in Miami-Dade County. The bad news is, Downtown West Palm Beach's total unsold inventory number does not include some 500 units that were previously acquired in distressed bulk deals by out-of-town investment groups that are now trying to resell the condos at a profit to individual purchasers."
The Downtown West Palm Beach market is defined as Palm Beach Lakes Boulevard south to Southern Boulevard, the Intracoastal Waterway west to Interstate 95 / Australian Avenue, according to Condo Vultures.
Developers have constructed or converted 16 condominium projects with more than 3,400 units since 2003 when the South Florida real estate boom began, according to Condo Vultures.
Buyers acquired 43 units for $111.3 million in 2003 followed by 78 unit sales for $83.9 million in 2004. Sales increased to 306 units for nearly $110 million in 2005 before peaking in 2006 with more than 1,060 new units transacting for $366.5 million.
As the real estate market began to slow, the sales velocity began to level off in Downtown West Palm Beach.
Buyers purchased 261 new condos for $112.4 million in 2007, and an additional 291 units for $120.5 million in 2008, according to the report.
In the last two years, buyers acquired nearly 650 units with the majority of the condos being sold to bulk buyers in large transactions for blocks of residences at the CityPlace South Tower, the Whitney, and the Edge, according to the Condo Vultures.
With the first quarter of 2011 transactions, buyers have now acquired more than 2,700 units for more than $1.1 billion in Downtown West Palm Beach since 2003, according to Condo Vultures.
It is important to note there are various stages to a residential real estate transaction in South Florida.
A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.
As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled.