Palm Beach Post Staff Writer
High-end homes are selling again, thanks to a resurgent stock market, falling
prices and the growing realization that the once-shaky economy has
stabilized.
But don’t call it a boom. In contrast with the mansion-buying frenzy that
peaked in 2008, shoppers this time around are driving hard bargains.
Palm Beach County had 517 sales of houses and condos for $1 million or more in
the first nine months of 2010, up 13 percent from 457 transactions during
the same period in 2009, according to the county property appraiser.
In one example of the renewed interest in high-end homes, a $4.5 million manse
in Palm Beach has two offers, and broker Kevin Leonard of Valore Group Real
Estate expects two more.
“We’re definitely seeing movement,” Leonard said.
International buyers and cash deals are driving the renewed interest, said
Linda Lafferty, regional senior vice president at Coldwell Banker in Boca
Raton.
“We really didn’t expect the million-dollar sales to go up this much,”
Lafferty said. “It was certainly a pleasant surprise.”
But Lafferty expects no return to the boom of 2008, when one record-shattering
deal followed another in Palm Beach. The money-is-no-object spree peaked
with Donald Trump’s $95 million sale of an oceanfront mansion.
Then came the global financial meltdown of late 2008, and the mansion market
fizzled.
Wealthy buyers have returned to the market, but the mood is different. Now,
when mansions sell, it’s for a discount. Mansion builder Frank McKinney in
September sold Acqua Liana for $15.5 million. He had listed the oceanfront
estate in Manalapan for $29 million.
In another September sale, an estate in the Ranch Colony development in
southern Martin County sold for $10 million. It originally was listed for
$15 million.
Those kinds of discounts are proving attractive to a narrow sliver of rich
buyers.
“It’s sort of like Walmart for the super-wealthy – discount pricing,”
said Sean Snaith, an economist at the University of Central Florida. “It’s
hard to talk about a $15 million home being a bargain, but for somebody, it
is.”
Lafferty said it’s no surprise that the wealthy are negotiating hard. With so
many mansions on the market, bargain-hunting buyers are making hard-nosed
offers.
“There is no doubt whatsoever that these properties have to be priced
right,” Lafferty said. “The inventory is abundant for people to
choose from.”
Snaith said rock-bottom interest rates also are spurring deals, not because
buyers need mortgages but because it feels like less of a sacrifice to take
cash out of the bank.
“The stock market has made a significant recovery, and for people who are
cash buyers, it’s a great time to buy,” Snaith said. “Interest
rates are low, so you’re not losing a lot by not keeping your money in the
bank.”
The uptick in high-end sales is sparking some interest from deep-pocketed
investors.
A group led by ING Clarion Partners recently paid $30 million for Old Palm
Golf Club, a golf course community in Palm Beach Gardens where houses start
at $1.3 million. The former WCI development has land for 145 new homes.
“We think there is a pent-up demand,” said Old Palm Golf Club
President Colin Wright.
In another spark of life, condo developer Kolter Group plans a 34-unit
building on State Road A1A just south of Briny Breezes. With units priced at
$1.4 million to $3 million, the project would be the first new condo project
in Palm Beach County since the real estate bust.
Staff writer Kimberly Miller contributed to this story.
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