WEST PALM BEACH, FL-For all the talk of the next condo construction wave in Downtown Miami, it’s a much different story in nearby Downtown West Palm Beach. The affluent city has more than 60 months of new condo inventory left from the last South Florida real estate boom if the current sales pace holds out.
So says a new report from Condo Vultures. Only about 10 new condos per month traded in the first three quarters of 2011—and nearly 650 unsold developers units remain on the market. And that doesn’t include the more than 400 units investment groups acquired in bulk deals that haven’t been resold to individual buyers.
So what’s the difference between Downtown Miami and Downtown West Palm Beach? Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures, tells GlobeSt.com the difference is international buyers with strong foreign currencies.
“Foreign buyers—who tend to arrive in South Florida via Miami International Airport—are generally most interested in condo product in Miami-Dade County,” Zalewski says. “The interest level tends to drop off as the buyers consider traveling north to Fort Lauderdale and ultimately West Palm Beach.”
As a result of this phenomenon, Zalewski says domestic buyers are for the most part the primary purchasers of unsold condo inventory in Palm Beach County. Going forward, he expects the dwindling supply of unsold new condo product coupled with rising prices to force some foreign buyers to increasingly look at Boca Raton and Downtown West Palm Beach for possible investments.
In the third quarter of 2011, buyers acquired 20 units for nearly $4.8 million between July and September in the Downtown West Palm Beach market. That compares to 35 new units for $12.5 million between April and June, according to the report, and 37 developer units for $9.3 million in the first quarter.
“As of the third quarter of 2011, the average new condo sales price in Greater Downtown Miami is $355 per square foot compared to $226 per square foot so it is only a matter of time,” Zalewski says. “The best thing that Downtown West Palm Beach condo market has going for it is the strong demand for product in Miami-Dade County and the limited supply of new product in the Fort Lauderdale and Hollywood/Hallandale Beach markets.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
