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Palm Beach Apartment Market Gets Tougher

WEST PALM BEACH, FL-Rising unemployment, shrinking population and foreclosures are the culprits.

By Carl Cronan | Updated on September 14, 2009

WEST PALM BEACH, FL-Sales of multifamily properties in Palm Beach County are being affected by rising unemployment, even though the market has defied the recession by posting modest declines prior to this year’s second quarter, according to a research report by Marcus & Millichap. The county’s apartment vacancy rate is expected to rise to nearly 10% this year after a slight decline in 2008.

A combination of rising unemployment, falling population growth and home foreclosures is creating a tough market for Palm Beach apartments. Investment activity in the county remains subdued, with economic concerns and stringent financing requirements relegating many prospective buyers to the sidelines, Marcus & Millichap states.

“Very few sales of distressed properties have yet to occur, but some properties bought at the peak of the market in 2005 and 2006 could encounter difficulties in the quarters ahead as softening fundamentals reduce property income,” says Greg Matus, regional manager with Marcus & Millichap in Fort Lauderdale. He notes that key areas of interest for prospective buyers include Boca Raton, West Palm Beach and Boynton Beach.

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