PALM BEACH , FL - The developer of The Edge condominium in downtown West Palm Beach hadn't sold a single unit all year. On Saturday, he unloaded 33 units in 90 minutes, thanks to an auction that promised fire-sale prices. Buyers agreed to pay a combined $6.3 million for units that had been priced at $13.7 million during the region's historic real estate boom, which has been followed by a painful bust. "We set the market," said Jay Jacobson, South Florida director for Edge developer Wood Partners. "At least now we know where it is."
Prices paid at Saturday's auction ranged from $131,000 for a 671-square-foot unit to $290,000 for a 1,175-square-foot condo with two bedrooms and an entrance onto the pool deck. Jack Murphy of Palm Beach bought that unit and another at the auction. He's hoping the discount prices erase the sting of paying $625,000 for a unit at The Edge during the boom. "Hopefully it's a good time to buy," Murphy said. "I love my unit. I love the building. The market just imploded."
Many of the buyers at the auction were investors or second-home buyers. Rick and Amelia Carter of Boca Raton paid $141,000 for a one-bedroom unit. Wood Partners' previous asking price: $385,000. "We thought maybe at these prices we'd be able to make a little money on it," Rick Carter said. Mumtaz Sayeed of Rhode Island also was attracted by the hefty price cuts. He looked for a vacation home here when prices were soaring but decided not to buy.
On Saturday, he paid $240,000 for an 1,180-square-foot condo last priced at $546,000. "Probably this is the best time to buy," he said. One woman who declined to be interviewed was the winning bidder for 17 of the 33 units sold on Saturday. Jacobson said the mystery bidder already owns a unit at The Edge and was working with a partner who saw an investment opportunity.
Vulture investors have been circling South Florida's overbuilt condo market for months. But Wood Partners wasn't entertaining bids from investors who wanted to buy units en masse, simply because no one knew how much West Palm Beach condos were worth. "We didn't know how to set a bulk sale," Jacobson said. "We've had a lot of bulk offers, and to be honest, some of them were damned insulting." Wood decided to drastically cut prices because so many other downtown units are being completed, including 469 condos at Two City Plaza, 420 at CityPlace South Tower and 288 at City Palms.
Developers expect buyers to back out of contracts to buy many of those units. Auctions such as Saturday's event have become commonplace as homes languish on the market, but results have been mixed. A Nov. 9 auction of condos at the Landmark at the Gardens development in Palm Beach Gardens resulted in only a handful of sales, say people who attended the event.
Wood had advertised an auction of 41 units, but decided to sell only 33 on Saturday. Jon Gollinger, head of auctioneer Accelerated Marketing Partners, hoped prices would be higher but was heartened to see some sales in an otherwise stagnant condo market. "We didn't get the number we wanted at all, but no one else is selling, so you've got to start somewhere," Gollinger said.
Source: PalmBeachPost.com